India will decide whether to raise its export limit for cotton above 5.5 million bales for 2010-11 in mid-January, Trade Secretary Rahul Khullar said on December 22. India would allow exports of the 2.5 million bales that exporters failed to ship under the 5.5 million bales allowed by December 15 after unseasonal rains hit arrivals.
Overseas demand for Indian cotton has increased after bad weather hit crops in China and Pakistan, both leading consumers. “Prices are likely to rise on strong demand from exporters. Overall demand is good enough to absorb the arrivals,” said Kishor Patel of KK Cotex, a firm in Rajkot, Gujarat.
Domestic cotton arrivals at spot markets as on December 26 rose by 5.4 per cent compared to the previous year on higher output and accelerated harvesting after weather turned dry, the state-run Cotton Corp of India (CCI) said. India is likely to produce more than 32.5 million bales of cotton in 2010-11, higher than last year’s 29.5 million bales, industry and government officials said.
“Despite heavy arrivals, prices are likely to move up as exporters are buying aggressively to meet their obligations as early as possible before any government intervention,” said Niraj Lakhani of Narendra Cotton Ginning and Pressing.
Prices of the most common Shankar-6 variety fell Rs300 at Rs41,800 per candy of 356 kg each on Tuesday, data from the Cotton Association of India showed. The price hit a record high of Rs46,200 last month.
Published in The Express Tribune, December 30th, 2010.
This article has been revised to reflect the following correction.
Correction: Dec 31st 2010
Due to an error, an earlier version of this article did not carry a suitable picture. The picture has been changed
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