Cotton imports set to rise as textile mills prefer U.S. cotton

As textile mills increasingly prefer to buy cotton from the U.S. in larger quantities. According to trade and industry sources, cotton imports this season might surpass the official estimate of 17 lakh bales.

Also, the units could get a 4 to 5% cost advantage, the sources added. Total imports during the last cotton season (2016-2017) were 30.94 lakh bales and the previous year it was 22.79 lakh bales. The total imports this season (October 2017 to September 2018) might cross 20 lakh bales, said Nishanth Asher, a partner with cotton trading firm RS Asher and Company.

Mills in Andhra Pradesh, Gujarat, and Tamil Nadu are buying from the U.S. The total import this season is already more than 10 lakh bales and majority stock is from U.S., he added.

J. Thulasidharan, president of the Indian Cotton Federation said that large quantity of cotton is available at discounted price from the U.S. for the current season — the reason why textile mills are booking cotton from the U.S. Though imported cotton is of slightly lower micronaire (one of the quality parameters of cotton) compared with the widely used domestic cotton (Shankar 6 variety), mills were opting for U.S. cotton as these were free of contamination and realisation would be better.

The price of Shankar 6 variety was Rs. 39,800 a candy on Friday. Mr. Thulasidharan said that cotton arrivals had picked up in the domestic market by nearly 1.5 lakh bales a day. The prices might not decline or increase much this year. Since there was surplus production globally, cotton export from India this season was also not high.

However, T.K. Radhakrishnan, president of Coimbatore Cotton Association, said that the total imports may not increase much. It depends on how Indian cotton prices move in the next two months. Domestic cotton production is estimated to be high this cotton season at 377 lakh bales.