Due to falling production, this year India is ready to double its cotton imports, when the global prices are low, by purchasing up to 2 million bales (1Indian Bale = 374 pounds) at a time.
In this year till now India has already bought around 1.5 million bales of cotton. The traders and government officials told that contracts for 400,000 more bales have been finalised
B. K. Mishra, who is the Chairman of Cotton Corporation of India, said that Cotton purchases from abroad will not survive beyond 2 million bales. Cotton Corporation of India is the state ruled body which purchases cotton from farmers and in the local and global markets, sell it.
By 12% to 33.8 million bales, Cotton production of India is expected to fall in this cotton year ending on Sept. 30 as calculated by the India’s Cotton Advisory Board.
For the world cotton market, the good news is Increase in exports and falling production fall as for last two years prices are low due to a large inventory of cotton in the China. As China has begun selling its excess cotton, the demand and prices have still reduced as from the last few months.
This year due to consecutive droughts and attack of damaging pests, local produce has reduced. This year in monsoon period, India although has a good rain, but early rain was required by cotton farmers.
Since 2011, India’s harvest this year may be its least, said by Cotton Advisory Board.
Though Cotton prices have settled around the world, but in India, prices have increased to $320 a bale that is 50% higher from the kickoff of the cotton season (Oct. 1 2015).
To import cotton South Indian Mills finds it cheaper as prices in local markets are higher even though India has a huge inventory of the merchandise.
As per D. K. Nair, who is the former Secretary-General, Confederation of Indian Textile Industry, Transport cost through the sea from Africa to the southern ports is a good deal less than the road – transportation cost from the Indian nations, naming it “alluring for domestic mills to import cotton”.