India’s cotton exports rose by 5% and stood at 7.8 million bales till February of this year compared to exports of 7.4 million bales during the August-February period of the 2012-13 marketing year (August-July). One bale has 170 kg. The pace of shipments this year is expected to taper in coming months depending upon demand from China, as per report compiled by US Department of Agriculture (USDA). The exports from December to February - traditional months of heavy shipments - were primarily to China, Bangladesh, Vietnam, and Pakistan.
The export of cotton is expected to be marginally higher in 2013-14 as against 9.9 million bales in the previous year. In the ongoing 2013-14 marketing year, total cotton exports is expected to touch 10.2 million bales as Indian cotton is favourably priced relative to the Cotlook A index that monitors global cotton trade.
However, cotton arrivals in market continue to lag last year’s pace and have reached 21.8 million bales. Arrivals are particularly slow in state of Punjab, Haryana, and Rajasthan where the pace of cotton deliveries to local markets is 30% behind a year ago. Arrivals in Andhra Pradesh are also running significantly behind the year ago pace.
Further, in hope of better pricing farmers are willing to hold cotton as the year progresses. In the same way, mills are maintaining smaller stocks of cotton, buying smaller volumes more frequently rather than fewer, larger purchases, in part because of the high rates of interest in India. Though cotton prices remain firm but spinning margins are strong pointing to continued strong consumption.