Cotton exports dip in June

BSE | NSE 10/02/12

Mumbai, July 2

Cotton exports plunged 64 per cent in June to 92,071 bales (of 170 kg) against 2.56 lakh bales exported in May, according to data released by the Textile Commissioner's Office in Mumbai.

The total exports between August 2008 and June 2009 stood at 22.86 lakh bales compared with 85 lakh bales in 2007-08.

Exporters registered with the Textile Commissioner's office to ship 3.64 lakh bales. Of this, 92,071 bales were exported. The Government has made it compulsory for all exporters to register with the Textile Commissioner's Office before actual exports are made.

Despite incentives

Incidentally, exports have been tumbling despite the five per cent incentive offered by the Government. "Very few traders could avail of the export incentive. By the time it was announced in February 2009, most of the cotton exporters had booked orders and it was almost the middle of the crop year. Moreover, we could not procure fresh stocks between September and January as the prices ruled high," said Mr Dipen Mehta, a Mumbai-based exporter. Gujarat and Maharashtra account for a majority of the cotton exports.

Also Read: Desi Bt cotton set to blossom in farms this year

The industry body Cotton Association of India had estimated exports to touch 40 lakh bales, about 10 lakh bales lower than the Cotton Advisory Board's outlook in February.

Aiming too high?

Trade sources believe that the country may not even achieve the revised export target. "Indian cotton has very few takers in the international market as the prices quoted by the exporters are very high. As it is, the demand for cotton has fallen substantially due to the economic slowdown," said Mr Mehta.

Among the major countries that import cotton from India are China, Bangladesh, Pakistan and Indonesia. China emerged the largest importer last year.

The 40 per cent hike in minimum support price by the Government last year has resulted in a steep rise in prices and fall in demand for cotton in the domestic markets, which were reeling under financial crisis. Cotton prices in India continued to rise, while global prices declined due to economic recession.

Taken from Business Line

thehindubusinessline.in