Mumbai: Cotton exports have begun to slide because traders who are wearing large premiums on US benchmark futures on lower output expectations when there is strong demand from local textile factories, industrial officials said.
Higher premiums Wanted by India, the largest cotton manufacturer in the world, can force Asian buyers such as Bangladesh, Vietnam and China to increase purchases from other suppliers such as the United States, Brazil, Australia and Africa.
“Exports cannot be installed.
We sell a small number to Bangladesh, but other buyers do not buy,” Vinay Box, director in the box industry based in Mumbai and an urgent industry to Reuters.
Cotton is offered around 135 cents per lb, costs and shipping costs, to buyers in Bangladesh for January and February delivery, almost 20 cents in the US future, said dealers with global trading companies.
Usually, India demands a premium of 5 to 10 cents / lb for the US future.
Domestic price record can withstand exports in the marketing year of 2021-22 which ended September 30, the box said.
He estimates that India will send only 4 million bals compared to 7.8 million bals a year ago as buyers turn to rival suppliers.
The Indian factory has exported 1.8 million bangs so far in season and tend to send around 1 million bals in January and February, the dealer said.
Some buyers from Bangladesh pay a higher price for Indian cotton because they need fast delivery and want guarantee delivery, Mumbai-based dealer said with a global trading company.
Nearly half of Indian cotton exports to Bangladesh is through land borders, making shipping more reliable than from rival suppliers.
Bangladesh also bought cotton from the United States, but US cotton plants will be available only after March and there is no guarantee that shipping will land on time because the lack of labor caused by the latest wave of Covid-19 pandemic can worsen congestion at the port, the dealer said.
Cotton production damaged rain, cotton production can drop to 34 million bals in the marketing year 2021-22, down almost 4% from last year as plants in the main producing countries damaged by rain during the harvest season, the box said.
Lower output reflected in the spot market, with daily trading volume fell to around 175,000 bales, while 250,000 bales will be more ordinary this year, the word dealer of New Delhi with a global trading company.
“Farmers know low plant size.
They release shares slowly, anticipating further rally in price,” said the dealer.
The Indian Spinning Mills aggressively bought raw cotton because the export demand for thread was strong, said the yarn manufacturer based in Ahmedabad in State Gujarat.
“Mills are building stocks.
Local consumption can rise above 35 million bales this year.
We may need to import good quality cotton,” he said.
The textile factory is interested in importing cotton, but overseas purchases are hampered by 10% import taxes that New Delhi enactment last year, said the box.
“Imports will land in large quantities if the government eliminates import duties,” said the box.
Cotton exports began to glide as traders looking for high premiums
