MUMBAI (Reuters) - India’s cotton exports could jump 40% in 2020/21 from a year ago to 7 million bales, the highest in seven years, as depreciation of the rupee and a rally in global prices allow exporters to clinch export contracts, the head of a leading trade body told Reuters.
Higher exports by the world’s biggest cotton producer in 2020/21 season, started on Oct. 1, could weigh on global prices and limit shipments from rivals such as the United States and Brazil to key Asian buyers such as China, Bangladesh and Vietnam.
“Export demand is good as our cotton is the cheapest in the world market,” Atul Ganatra, president of the Cotton Association of India, said on Thursday.
A recovery in global prices could lift Indian exports to 7 million bales in the new season from 5 million bales a year ago, Ganatra said.
Global cotton prices have been near their highest in nearly 17 months, while the Indian rupee hit a two-month low this week, increasing traders’ margins from overseas sales.
Indian cotton is being offered at around 74 cents per lb, cost and freight-basis, to buyers in China, Bangladesh and Vietnam for November shipment, versus more than 77 cents from Brazil and the United Sates, dealers with global trading firms said.
Most of the shipments are heading towards China and Bangladesh, said Arun Sekhsaria, managing director of exporter D.D. Cotton.
India will have ample surplus for exports as the country is set to produce more cotton this year than last year’s 35.45 million bales, Sekhsaria said.
In October traders exported 700,000 bales and contracts for another 1 million bales have signed for November shipment, said a Mumbai-based dealer with a global trading firm.
Limited availability of containers has been delaying exports by a few days and cotton exporters have requested the Commerce Ministry to provide more containers, Ganatra said.
(1 Indian bale = 170 kg)
Reporting by Rajendra Jadhav; Editing by Steve Orlofsky
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