India halts cotton exports to cool domestic prices
Wednesday, 21 April 2010
NEW DELHI, April 20 (Bloomberg): India, the world's second-largest cotton grower, halted exports to boost domestic supplies and cool prices that have jumped 27 percent in the past year.
Registration of export contracts have been suspended from yesterday until "further orders," Textile Commissioner A.B. Joshi said by phone today. Those registered before yesterday and unused will need to be revalidated, according to a statement on the commissioner's Web site.
Cotton prices advanced in after-hours trading in New York, adding to a 69 percent rally in the past year, on concern the halt on shipments by India may exacerbate tight global supplies. World inventories will decline 19 percent in the year through July as demand increases 5.7 percent, the US Department of Agriculture said on April 9.
Long-staple cotton prices in India have gained 27 percent to 7,958 rupees ($179) per 100 kilograms in the past year, according to data on the Cotton Association of India's Web site. Cotton for July delivery added 1.4 percent to 82.75 cents a pound on ICE Futures US at 1:32 p.m. Mumbai time.
China, the biggest cotton user, may face a shortage because of falling production and reduced global supplies, according to CNCotton.com. Consumption may exceed supply by 3.5 million tons in the year ending Aug. 31, and supply will remain tight next year, Mei Yong, a director at the portal owned by China National Cotton Reserves Corp., said on April 16.
"South East Asian markets and our main buyer, China, will pass on their enquiries to the other countries where exports are allowed freely," Kantilal V. Shah, chairman & managing director of exporter Gill & Co. Pvt. in Mumbai, said in e-mailed comments. "This could be at the cost of Indian cotton." The company is unsure whether it will be able meet its sales commitments for April and May, he said.
Registration of export contracts have been suspended from yesterday until "further orders," Textile Commissioner A.B. Joshi said by phone today. Those registered before yesterday and unused will need to be revalidated, according to a statement on the commissioner's Web site.
Cotton prices advanced in after-hours trading in New York, adding to a 69 percent rally in the past year, on concern the halt on shipments by India may exacerbate tight global supplies. World inventories will decline 19 percent in the year through July as demand increases 5.7 percent, the US Department of Agriculture said on April 9.
Long-staple cotton prices in India have gained 27 percent to 7,958 rupees ($179) per 100 kilograms in the past year, according to data on the Cotton Association of India's Web site. Cotton for July delivery added 1.4 percent to 82.75 cents a pound on ICE Futures US at 1:32 p.m. Mumbai time.
China, the biggest cotton user, may face a shortage because of falling production and reduced global supplies, according to CNCotton.com. Consumption may exceed supply by 3.5 million tons in the year ending Aug. 31, and supply will remain tight next year, Mei Yong, a director at the portal owned by China National Cotton Reserves Corp., said on April 16.
"South East Asian markets and our main buyer, China, will pass on their enquiries to the other countries where exports are allowed freely," Kantilal V. Shah, chairman & managing director of exporter Gill & Co. Pvt. in Mumbai, said in e-mailed comments. "This could be at the cost of Indian cotton." The company is unsure whether it will be able meet its sales commitments for April and May, he said.