Rising local demand cuts South Asian cotton exports
Rising local demand cuts South Asian cotton exports
SINGAPORE (Reuters): Climbing demand from textile mills in
India and Pakistan, and lower local crops, are likely to curb
South Asian cotton exports in coming months, opening up markets
for Australia, industry sources said on Thursday.
"Higher mill consumption, a fall in production and high
domestic prices...so, where is the chance for exports?" said one
somber Indian cotton exporter.
Australian cotton producers said recently new spinning markets
in India, Pakistan, Bangladesh, Sri Lanka and Turkey pointed to
good regional prospects for their cotton exports.
The textile industry in India and Pakistan is performing
strongly, with Indian officials saying cotton textile exports are
growing at more than 10 percent a year.
"The demand for our cotton textiles is fairly strong from
Europe and the United States, even from countries like
Bangladesh," said D.K. Nair. secretary-general of the Indian
Cotton Mills Federation.
It's a similar story in Pakistan. Last year's low cotton
prices boosted yarn and textile exports and textile mills have
invested millions of dollars to import machinery to expand
spindle capacity.
Demand for cotton from Pakistan's textile industry could hit
9.5 million bales (375 lbs each) this year compared with last
year's 9.2 million bales, cutting exports to 500,000 to 600,000
bales from last year's 800,000 bales, industry officials say.
Output from the current crop could exceed the official target
of 9.7 million bales, but would still be below last year's level
of 10.5 million bales, they say.
Adding to exporter woes, the government recently raised cotton
state support prices, a move which traders feel could push up
domestic prices further and make exports uncompetitive.
Exporters are banking hopes on a recent drop in the value of
the rupee. "We are still one of the cheapest in the world and
even government support won't hurt exports much," Maqbool Sadiq,
chairman of the Karachi Cotton Association, the country's premier
cotton trading body, told Reuters.