MUMBAI: Indian cotton exports have begun to slide due to traders charging hefty premiums over benchmark US futures on expectations of lower output at a time when there is strong demand from local textile mills, industry officials said.
The higher premiums sought by India, the world’s biggest cotton producer, could force Asian buyers such as Bangladesh, Vietnam and China to increase purchases from other suppliers such as the United States, Brazil, Australia and African nations. “Exports are nonviable.
We are selling a small amount to Bangladesh, but other buyers are not purchasing,” Vinay Kotak, director at Mumbai-based Kotak Ginning and Pressing Industries Pvt. Ltd told Reuters. Indian cotton is being offered at around 135 cents per lb, cost and freight-basis, to buyers in Bangladesh for January and February shipment, nearly 20 cents over US futures, dealers with global trading firms said.