Cotton exports from India stop, drought affects local prices
Q. Cotton exports from India have come down on account of what factor?- Published on 09 Jun 16a. Local prices have rallied
b. Tight supplies because of drought
c. Both a and b
d. Neither a nor b
ANSWER: Both a and b
Cotton exports from India, the world’s biggest producer has nearly halted as local prices have rallied due to tight supplies because of drought forcing key importers like Bangladesh, Pakistan and Vietnam to turn to other suppliers. Freeze in Indian export will promote Australia, Brazil and the US to raise shipments and push global prices to their highest since August.
- Price rise could substantially push up fabric and clothing prices and put pressure on the margins of garment making
- Landed cost is Indian cotton is around 75-76 cents per lb for Pakistan and Bangladeshi buyers and this is around 73 cents for Brazilian cotton
- Pakistan and Bangladesh prefer Indian cotton due to low freight charges and local cotton spot market prices have risen by 10 percent from a month ago to 38,4000 rupees per 356 kg due to limited supplies after consecutive droughts cut production
- India may produce 334.1 million bales of cotton in 2015-2016 starting on October 1 from last year’s output of 38.3 million, according to estimates by Cotton Association of India.
