Cotton forward export contracts halve amid lower global prices

India’s forward export contracts of cotton have declined to about 7 lakh bales from 15 lakh bales for November December delivery to the previous year, amid lower international prices.

According to a Maharashtra based ginner, BS Rajpal, international prices are ruling low everywhere. Hence traders are cautious while entering into forward export contracts, fearing domestic prices may remain high with the government offering minimum support price to growers.

However, traders are expecting domestic cotton prices to decline by October or November, with the arrivals of new kharif crop beginning in full swing.

According to US Department of Agriculture estimates for 2017-18, global cotton production at about 120.8 million bales is expected to be 13 percent more than in the previous season as farmers shifted from other crops to cotton due to more attractive prices.

According to government figures, India which became the world’s largest cotton production in 2016-17, has retained the position this year too. Cotton acreage is up 19.3 percent in 2017-18 compared to previous year, at 121.51 lakh hectares,

Though there are concerns about production losses due to floods in Gujarat and prolonged dry spell in peninsular India in August, the industry is upbeat about production and expects 2017-18 output at 375380 lakh bales of 370 kg each.

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