India Will Miss Cotton Target on Lower Chinese Demand
Source: bloomberg.net. Date: 2009-07-27
July 23 (Bloomberg) -- India, the world‘s biggest cotton exporter after the U.S., will miss a target to export 5 million bales of the fiber this year, after China cut back purchases, supporting a rally in global prices.
Exporters sought government approval to ship 3.2 million bales, each weighing 170 kilograms each, since the season began Oct. 1 and exported about 2.6 million bales, India’s Textiles Commissioner A.B. Joshi said in a phone interview today. Exports totaled 8.5 million bales last year.
Cotton traded in New York has climbed 24 percent this year as a drop in global production outpaces slowing demand. Futures fell to the lowest in a week yesterday amid concern the highest prices in 10 months will cool demand from textile makers.
It appears that we won‘t be able to meet the target this year,Joshi said. China reduced imports, though they are still the biggest buyer of Indian cotton, and domestic prices were too high as well.
India’s government in September raised the price paid to cotton growers by as much as 48 percent in September, lifting costs for importers such as China. The Asian nation’s imports slumped 41 percent in the January-June period to 735,000 tons, the National Development and Reform Commission said July 20.
India‘s Cotton Advisory Board estimated exports in the year to Sept. 30 at 5 million bales and the agency may revise the estimate in a meeting next month, Joshi said.
Higher domestic prices are prompting farmers to boost area planted with cotton this year and inadequate monsoon rains this season will aid cotton, which requires less water, Joshi said.
Farmers have planted cotton across 6.8 million hectares as of July 16, compared with 6.1 million hectares a year earlier, according to the farm ministry.
Production may increase by as much as 10 percent next year, the Cotton Association of India said last month. Output may rise from the 29.1 million bales this season with the area increasing about 5 percent from 9.4 million hectares, it said.
