China has reportedly signed contracts for 5 lakh bales of cotton from India for the new cotton season. As the country has announced an additional quota of 48 lakh bales, whose procurement may start from July 1, India may benefit by at least selling 10-15 per cent of that quantity, according to industry sources. China’s buffer stocks began depleting from 2015.
According to traders, China is likely to import at least 20 lakh bales from India. India’s cotton season starts from October.
Since Indian prices are the cheapest in international market, China will also look towards India for cotton, said Arun Sekhsaria, managing director, DD Cotton, a major international cotton exporter. Shipments are expected to leave from India in November-December, a leading Indian business daily quoted Sekhsaria as saying.
China generally has a buffer stock of around 120-150 lakh tonnes that is likely to reduce to 25-40 lakh tonnes by August this year and therefore, it has started building up stocks, he said.
Indian exporters generally start selling new season cotton from August end after estimating the nation’s crop output, but robust demand from China and higher prices have prompted them to sign deals in advance, according to industry experts. (DS)
Fibre2Fashion News Desk – India