July 28, 2020: The Cotton Corporation of India (CCI), which is holding surplus stocks of cotton just ahead of the next harvest season, is trying to boost exports of the fibre crop.
A memorandum of understanding is being worked out to export 1.5-2 million bales (of 170 kilograms each) of cotton to Bangladesh while the state-run CCI will also set up its own warehouse in Vietnam to boost cotton exports.
“We are in the process of signing a government-to-government memorandum of understanding with Bangladesh to export about 15-20 lakh bales of cotton to that country,” said PK Agarwal, chairman, CCI.
The corporation had procured nearly a third of India’s 2019-20 cotton output. Of the 12.1 million bales it had procured, along with its agent Maharashtra State Cooperative Marketing Federation, it has been able to sell 900,000 bales in the present cotton season, which ends on September 30.
“To increase exports to Vietnam, we are looking for a warehouse to facilitate transport and easy availability of our cotton to buyers in Vietnam,” said Agarwal.
Countries such as Bangladesh, Vietnam and Sri Lanka have duty-free access to the markets of Europe, US and China, which give them an edge over Indian yarn and garment exporters, who have to bear the burden of various duties.
The CCI has now started offering discounts on bulk purchases to domestic buyers, as the country is looking at yet another bumper production thanks to good progress of monsoon rainfall. It sold 700,000 bales of cotton last week.
However, the spinning industry is not in a hurry to buy cotton thanks to ample supplies coupled with subdued demand from the textile sector. “We have advised the industry to be watchful, but there is no need to worry till the CCI sells about 5 million bales,” said an executive of South Indian Mills Association, who did not wish to be identified.
Source: Economic Times
