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Record cotton imports despite good crop

G. Chandrashekar

MUMBAI, July 11

DESPITE satisfactory monsoon rains so far and bright prospects for cotton production in the ensuing crop year, cotton import contracts are continuing to be signed. Interestingly, in addition to the estimated arrival of about 20 lakh bales till June, furt her commitment for around 8-10 lakh bales have been made by traders and textile mills.

This takes the projected commitment so far this season to an unprecedented 30 lakh bales. According to traders, only a part of the pending commitment may arrive over the next two months and some contracts will spill over into the new year. Also, traders have already begun to contract for arrival in the new season.

In 1999-2000 when cotton imports were about 18 lakh bales, there was a lot of noise from the domestic trade and growers; but the current year is expected to end with a record 24 lakh bales or so, despite unchanged domestic output.

Over the past six weeks, the south-west monsoon has covered principal cotton growing areas well, except of course some southern centres; but planting there takes place slightly later in the season. There is expectation of a decent expansion in acreage an d a definite bounce back in output if weather holds over the next 6-8 weeks.

Given the current production prospects, many traders seem to be unsure about the import requirement in the new year. They are watching the progress of monsoon closely, but do not want to be left out of the import race. No wonder, the spot market has been under pressure for several days now, despite the lean season. There is also expectation that with improved arrivals of indigenous crop and continuing imports, prices could be strained.

Traders said a major attraction of cotton imports was consistent quality and payment terms. Overseas buyers are only too happy to supply with a credit period extending up to 180 days. The US, Australia, African countries, Paraguay and Argentina are majo r origins from where Indian importers source cotton.