By Meenakshi Sharma
MUMBAI, March 8 (Reuters) - India's cotton imports could
jump by two-thirds to over 2 million bales in 2012/13, a top
industry official said, as a seasonal output slowdown and
stockbuilding push domestic prices higher in the world's
India exported cotton in the first part of the year to Sept.
30, as demand was amply covered by production, but it will turn
to imports towards the end of the harvest period as supplies
start to wane and domestic prices rise.
"Cotton imports may exceed the target of 2 million bales in
2012/13," D.K. Nair, secretary-general of the Confederation of
Indian Textile Industry (CITI), told Reuters on Friday.
Textile Commissioner A.B. Joshi, the top government official
for the industry, said in January that cotton imports could
total 2 million bales this year. Last year, India imported 1.2
Currently cotton supplies to spot markets across the country
are around 100,000 bales per day, down from 200,000 bales per
day at the start of February, according to traders.
The government has bought 2.5 million bales of the crop,
which is expected to reach about 33 million bales for 2012/13,
down from a record 35.5 million bales a year earlier.
It has allowed 8 million bales of exports for the year to
Sept. 30, 2013, of which trader expected around 6 million bales
to have been already been shipped.
New Delhi controls supply in order to protect its domestic
industry, which uses about 26-27 million bales a year.
Now, dwindling domestic supplies and stockbuilding have
pushed local prices higher, hurting mills which struggle to pass
cost increases on in a country where nearly half the 1.2 billion
population live on less than $1.25 per day.
"Mills cannot afford higher prices because they may not be
in a position to pass it on to their customers. So there are
chances that they might import," Nair added.
The March cotton futures contract on the
Mumbai-based Multi Commodity Exchange (MCX) has risen more than
9 percent since the beginning of February to Friday's close at
18,660 rupees ($340) per bale of 170 kg.
India usually imports raw cotton mainly from the United
States, Brazil, Pakistan, Egypt and other African countries
"This is not the first time we (India) are importing cotton
from Africa, this happens every year. Import enquiries increase
after March as the Indian supply season draws to a close," said
Dhiren N. Sheth, president of the Cotton Association of India.
He added imports could rise from West and East Africa.
The Cotton Textiles Export Promotion Council (TEXPROCIL) and
CITI has asked the government to release stocks, hoping to cool
"Around 20,000 tonnes of raw cotton have been contracted
from Africa during the last 30 days. Indian prices always used
to remain lower than international prices but this time they are
5-7 percent higher," said Manikam Ramaswami, TEXPROCIL chairman.
Indian buyers are importing cotton in the range of 90-95
cents per pound from Africa, he said.
Current price gains in domestic markets are likely to crimp
further exports and could prompt private traders to release
their stocks, said Nair. There have also been rumours in U.S.
markets that India might introduce an export ban.
Besides the state-run Cotton Corporation of India, the
National Agricultural Cooperative Marketing Federation (NAFED)
has been told to procure supplies in several states, he said.
India is expected to produce 33 million bales in 2012/13
according to the latest forecast from the state-run Cotton
Advisory Board. Consumption is seen around 26-27 million bales.
(Reporting by Meenakshi Sharma; Editing by Jo Winterbottom and