Top cotton buyers switching to Indian cotton as hurricanes hit US crop

YarnsandFibers News Bureau 2017-09-15 10:00:00 – Karachi

With Hurricanes Harvey and Irma causing widespread damage to the crop in Texas and Georgia, major cotton producing states in the USA, the biggest exporter of the fiber, most of the top cotton buyers are switching to Indian cotton from the U.S.

India, the world’s second-biggest cotton exporter, has managed to seal deals in the past week alone to sell about a million bales to China, Taiwan, Vietnam, Pakistan, Bangladesh and Indonesia - key garment suppliers to brands such as H&M , Inditex -owned Zara and Wal-Mart Stores Inc .

Dealers expect contracts similar to last week in the next few months, which could help India’s exports grow by a quarter in the 2017/18 season beginning October.

Chirag Patel, chief executive at Jaydeep Cotton Fibers Pvt Ltd, a leading exporter said that Indian cotton has great chances this year. As farmers are likely to harvest a record 40 million bales of cotton in the 2017/18 season beginning Oct. 1, 2017, bringing domestic prices down and making exports even more competitive.

For the new 2017/18 season, farmers have planted 12.1 million hectares with cotton, up 19 percent from a year earlier, farm ministry data showed. India harvested 34.5 million bales of cotton in the 2016/17 season.

Favorable crop conditions would help India sell 7.5 million bales of cotton on the world market in 2017/18 against 6 million bales in the previous year, said Nayan Mirani, partner at Khimji Visram & Sons, a leading cotton exporter.

Some traders believe that India’s exports could surpass 8 million bales if China, the world’s biggest cotton consumer, steps up imports in 2017/18.

Hobbled by the rising rupee and unattractive global prices, India was struggling to sign export deals until a few weeks ago. But a recent rally in global prices made overseas more sales competitive.

Other than attractive prices, close proximity encouraged most Asian buyers to turn to India. While cargoes from the United States take about 50 days to reach Vietnam, Bangladesh and Pakistan, India can ship its cotton in two weeks.

India’s new season crop will be available to buyers from October, but the supplies from the United States will reach consumers only in January, said Mirani of Khimji Visram, a top exporter.

Vu Duc Giang, chairman of Vietnam Textile and Apparel Association said that the current market trends give cotton buyers a chance to look at alternative supplies.

Other cotton producers like Brazil and Australia could benefit from lower supplies from the United States, but may find it difficult to match the price offered by India, where a bumper harvest is likely to keep the rates lower.

Traders in India, also the world’s biggest cotton producer, signed their export deals at around 80 cents per lb on a cost and freight basis, nearly 2 cents lower than the supplies from the United States, dealers said.

Peter Egli, risk manager at Plexus Cotton Ltd, a Chicago-based merchant, referring to the impact of Harvey in the top-producing U.S. state said that they have definitely lost cotton in Texas. It wiped out 500,000-600,000 bales.

However, the U.S. Department of Agriculture this week said U.S. cotton output is seen at 21.76 million bales for 2017/18 compared with 20.55 million bales projected last month. In 2016, the United States exported 86 percent of its cotton, 69 percent of which went to Asia.

0 0 vote
Article Rating
Inline Feedbacks
View all comments

Market Intelligence

Ask for free sample Report

why us?
21 yrs


Fortune 500

Customer Base


dedicated team


Countries Served Worldwide


Register below to receive our newsletters with latest industry trends and news!

WeCreativez WhatsApp Support
Our support team is here to answer your questions via WhatsApp. Ask us anything!
? Hello