“Indian cotton has become uncompetitive in the world market. The largest importer, China, has started importing cotton from Brazil as it has become a cheaper substitute,” said M B Lal, former chairman of the Cotton Corporation of India.
India’s shipment of nearly 400,000 – 500,000 bales of cotton is under serious threat of delivery default as Indian exporters face higher procurement prices than contracted for cotton exports. The CAI in its latest report estimated the cotton crop for 2018-19 at 32.1 million bales of 170 kgs each which is lower by 0.7 million bales than its previous estimate of 32.8 million bales made in March.
“Rising cotton prices may restrict India’s exports this year. India has exported around 4 million bales so far this year,” said Arun Sakseria, a veteran cotton exporter.
Meanwhile, K V Srinivasan, Chairman, Cotton Textile Export Promotion Council (Texprocil) has urged the government to emphasise the need to boost exports of textile products not only to compensate the decline in cotton exports, but also to narrow the trade deficit with China.
“Exports of cotton textiles had contributed to the reduction in trade deficit with China, the largest importer of India’s cotton. India’s exports of textiles and apparel posted an increase of 69 per cent to $1.5 billion between April 2018 and February 2019 compared to $919.76 million in the corresponding period last year. Export of cotton textiles can be increased further if the tariff disadvantage of 3.5 - 10 per cent suffered by India in comparison to Vietnam, Pakistan and Indonesia on textile products is addressed by making further special efforts,” Srinivasan added.
China is an important trading partner for India with an import of $65.22 billion worth of goods and export of S$ 15.10 billion for the period April – February 2019., recording an all time high in exports and sharp decline in imports from China.