State-owned Cotton Corporation of India may export 1.5 million to 2 million cotton bales to Bangladesh in order to reduce India’s record surplus before the new crop begins arriving in October. It generally sells cotton to local mills and traders at market prices, after buying from farmers at government-set minimum rates. Export prices will be decided by the two governments using the Cotlook index. Industry researcher Cotlook’s benchmark is a daily average of the five cheapest cash prices in the world.
Cotton Corp plans to sell 500,000 bales to 700,000 bales of 170 kilograms each to Trading Corp of Bangladesh in the marketing year ending on Sept. 30. The rest of the quantity will be shipped in 2020-21.
India is likely to have a record closing stockpile of 10.25 million bales by September 30, according to the Cotton Association of India, as domestic consumption may drop more than 20 per cent from a year earlier to 25 million bales in 2019-20.
Cotton Corp bought 10.5 million bales this year, the highest-ever procurement. It included 2 million bales purchased during a nationwide lockdown to prevent distress selling by local growers. The company is carrying about 8.4 million bales at present and its ending reserves may not exceed 3 million bales on September 30.
