February 2024 sees India’s cotton export figures climbing to a zenith not observed in the past two years, driven by a significant upswing in global cotton prices. This shift renders Indian cotton a highly sought-after commodity among Asian importers, diverging from their longstanding preferences for Brazilian and American sources.
The rise in benchmark U.S. cotton futures initially posed export challenges for India, the globe’s second-ranking cotton producer. Yet, the recent price escalation has redirected international buying attention towards Indian shores, catalyzing a surge in export engagements.
Trade insiders have confirmed agreements for exporting an impressive 400,000 bales (68,000 metric tons) of cotton from India in February alone, setting a record not matched since February 2022. China, Bangladesh, and Vietnam emerge as prime destinations, highlighting the widespread demand for Indian cotton.
“At present, Indian cotton stands out as highly competitive globally, being the most cost-effective option available. This competitiveness has significantly boosted export momentum,” Atul Ganatra, president of the Cotton Association of India, shared with Reuters.
Ganatra’s outlook is buoyant, with projections indicating India’s potential to ship 2 million bales by the 2023/24 marketing year’s end, a notable leap from previous expectations of 1.4 million bales. Some market analysts project even higher figures, suggesting exports could soar to 2.5 million bales, leveraging the price advantage of Indian cotton being 6 to 7 cents per lb cheaper than predominant U.S. supplies.
The sustenance of India’s competitive price point could amplify export volumes, possibly reaching 300,000 bales in March alone, as per insights from a dealer associated with a global trade house in New Delhi. This burgeoning demand is partially propelled by vigorous acquisitions by China, which had also played a role in escalating U.S. cotton prices. Reports suggest China has secured around 300,000 bales of Indian cotton for imminent shipment.
Vinay Kotak, director at Kotak Ginning and Pressing Industries, emphasized India’s pricing and freight cost advantages over U.S. and Brazilian counterparts, attributed significantly to its geographical closeness to key import nations. Despite this export fervor, India’s cotton production is anticipated to diminish, potentially curbing export capacities. Kotak alerted to a projected 7.7 percent dip in India’s cotton output to 29.41 million bales for the 2023/24 season, marking the lowest since 2007/08, as reported by the Cotton Association of India.
This transformative period in the cotton trade landscape underscores the fluid nature of international commerce, where pricing, output, and strategic geopolitical interactions profoundly influence market dynamics.
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