The Cotton Corporation of India (CCI) has finally decided to come out with global tender for export of cotton to Bangladesh. CCI chose Bangladesh as the logistics are better and easier to manage either by the sea or roadways. China, the world’s biggest buyer, is importing less of the fibre from this year which has affected Indian export.
China has been the largest importer of Indian cotton over the last three years. The response from Bangladesh has been good and should this sale be successful, CCI has plans to tap Vietnam as well CCI CMD, BK Mishra said.
The CCI is now reworking its pricing strategy for international buyers and may soon bring it down to 70 cents. Mishra expects a good response to the tender that has been floated by the corporation on its website amid concerns among the industry that not enough cotton has been exported,
According to Mishra, the earlier advertisement by CCI inviting buyers to register themselves for export to Bangladesh had got a good response and 8 to 10 exporters had registered themselves with CCI in addition to some of the domestic buyers who export as well. Bangladesh usually purchases around 55 to 60 lakh bales of cotton from India.
Due to the price of 76-77 cents quoted by CCI, the tender initially did not garner much response. The working price for exporters is 68-70 cents since the rupee value has increased to 62.15 from 62.70 against the dollar.
The Cotton Advisory Board (CAB), a body comprising growers, traders, exporters and the textile industry, has projected exports at 90 lakh bales this season against 117.92 lakh bales last season.
The International Cotton Advisory Committee (ICAC) has also forecast lower exports, though it sees domestic demand growing 4% year-on-year. CAB predicts domestic demand rising to 311 lakh bales against 298.88 lakh bales.
The Southern India Mills Association (SIMA) recently appealed to the centre to consider industry’s long-pending demand of restructuring the CAB by inducting major stakeholders of cotton so that better strategy and policy could be adopted by the CCI, T Rajkumar, chairman, SIMA in a release said.
