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India woos Bangladesh as China cuts cotton imports
May '15
Bangladesh may emerge as an unlikely saviour for the Indian cotton sector that has been left reeling in the face of low Chinese imports. Indian cotton export is expected to fall to a six-year low as China continues to cut imports. According to government estimates, lesser cotton imports by China may lead to as high as 41 per cent drop in shipments from India this year.

China had been the largest importer of Indian cotton in the last three years. Commerce minister Nirmala Sitharaman told the Rajya Sabha recently that China had imported cotton worth $696.5 million in the first 11 months of FY15. In FY14, India had exported $1,912.95-million of cotton to China and $2237.38 million in 2012-13. In April-February 2014-15, India’s total export of cotton stood at $1707.5 9 million. Bangladesh was the next largest importer. In 2014-15 till February, India exported cotton worth $510.26 million against $698.88 million in entire FY14. In 2012-13, Indian cotton exports to Bangladesh stood at $610.06 million. Vietnam was the third largest cotton importer from India.

Estimates of the cotton advisory board show that cotton export will probably drop to seven million bales in the 12 months ending September 30 from 11.79 million bales in the corresponding period a year earlier, the lowest since 2008-2009. Cotton shipments from India have been recorded at around five million bales this season.

Although there is a huge difference in the volume of cotton imports between China and Bangladesh, India is pinning its hopes on Dhaka to import more of its cotton to arrest the slump after the Chinese slowdown. But how much difference can Bangladesh make to India’s fortune, it still to be seen.

Bangladesh is now the world’s second largest exporter of apparel, behind China. Much of Bangladesh’s apparel export is fuelled by cotton sourced from India. Now, the Cotton Corporation of India (CCI) has decided to scale up its exports to Bangladesh.

“CCI has started issuing advertisements inviting global parties to directly get registered with the agency for purchase of cotton for the Bangladesh market. A separate tender will be floated after the registration process is completed,” CCI CMD BK Mishra said.

The agency had earlier put on hold its plan for a global tender for cotton sale. Bangladesh buys around 55-60 lakh bales from India. CCI chose Bangladesh as the logistics are better and easier to manage either by sea or road.

Mishra said the response from Bangladesh had been good and if the sale is successful, CCI plans to tap Vietnam market to increase cotton exports. (SH)

Fibre2fashion News Desk – India

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