Cotton exports soar on demand from China

NEW DELHI: The country’s cotton exports during ’05-06 are likely to exceed the previous forecasts made by the US Department of Agriculture (USDA) on the back of surge in demand from China and increased domestic production.

The USDA has revised upward its forecast for Indian cotton exports for the marketing year ending July, ’06 by 750,000 bales to 3.3m bales, while the forecast for ’06-07 has been increased by 250,000 bales to 4.3m bales.

“Increasing exports to China supported the large increase in India’s trade. Chinese imports of Indian cotton surged from a total 210,000 bales in ’04-05 to 2.3m bales ’05-06,” the report says.

Every month since December ’05, India has been China’s second leading supplier of cotton, behind the US and surpassing Uzbekistan, it added.

Indian exports to other markets, including Taiwan, Thailand, Turkey, have also shown a significant increase in recent months.

The report has attributed much of the growth in India’s cotton trade to increased cotton production in the latest three crops.

“Average production in ’04-05 to ’06-07 is estimated 60% above the average of the three previous years,” it said, adding that the increase in production is largely due to higher yields, better cultural practices including an increase in Bt cotton acreage.

“Higher yields have supported grower returns compared to alternative crops and helped boost area,” it said. The higher production has outpaced India’s rapid growth in consumption, which has averaged 5% since ’01-02.

It has helped India to become the second largest exporter in ’06-07 from being the second largest importer in ’01-02, the USDA report said.

Despite large exportable supplies, India would continue to import longer staple and higher quality medium staple lengths, it said. The US is the leading supplier of India’s cotton imports, which are forecast to reach 500,000 bales in ’06-07.