Falling currency, a boon for cotton exporters
Updated: Jun 13, 2013 03:47:33pm
New Delhi, Jun 13 (KNN) The falling value of Indian currency is benefiting the cotton traders, who now are exporting more attributing the prices at home.
The import orders are coming from neighbouring China and Bangladesh; even countries like Pakistan, Vietnam and Thailand have placed orders.
"We expect exports to rise to around 10 million bales (a bale is 170 kg) this year against last year's 12 mn. The Cotton Advisory Board's initial estimate was around 8.5 mn bales. The rise is mainly driven by a weak rupee," said a media report quoting President, North India Cotton Association, Rakesh Rathi.
India has emerged as a leading exporter of rice and wheat this past year, but was increasingly facing tough competition from countries such as Pakistan and Vietnam, where buyers were finding lower prices.
Vietnamese exporters still have a price advantage against Indian competitors for some common grades, but the gap has narrowed in tandem with the rupee losing value against the Vietnamese currency, the dong.
On Wednesday, the dollar was trading around 58 rupees, compared with around 53.5 rupees in early May and 56.5 rupees to start this month. It reached a record high of nearly 59 rupees on Tuesday. Since early May, the dollar has gained 8.4 per cent on the Indian rupee and 1 per cent against the dong. The Pakistani rupee has been steady during the same period.
With the Indian Rupee hitting a record low against the US dollar this week, exporters of agricultural commodities, including rice, wheat and cotton, were optimistic that their products may attract price-conscious buyers.
"Already large quantities have been exported. Further, registration of around 300,000 bales has been done in May,” said a leading exporter, which according to him caused spot cotton prices to jump to around Rs 39,700 a bale.
In the domestic market, prices have risen in the past month to Rs 41,000 a candy (356 kg), from Rs 39,500.
Domestic cotton prices have risen by four per cent to five per cent over the past month as supply tightened toward the end of harvesting season, but the rupee weakness has negated the rise in domestic prices.
Exports of cotton yarn are picking up, as China—the world's largest importer of the textile-making material—has started buying after a gap of three or four months.
India's weather department has forecast that monsoon rainfall will be in line with the 50-year average this year, which indicates well for production of crops ranging from rice and wheat to oilseeds.
Assuming production is in line with the weather forecast; India could start exploring new markets for its agricultural products in the European Union as well as Japan. (KNN)
The import orders are coming from neighbouring China and Bangladesh; even countries like Pakistan, Vietnam and Thailand have placed orders.
"We expect exports to rise to around 10 million bales (a bale is 170 kg) this year against last year's 12 mn. The Cotton Advisory Board's initial estimate was around 8.5 mn bales. The rise is mainly driven by a weak rupee," said a media report quoting President, North India Cotton Association, Rakesh Rathi.
India has emerged as a leading exporter of rice and wheat this past year, but was increasingly facing tough competition from countries such as Pakistan and Vietnam, where buyers were finding lower prices.
Vietnamese exporters still have a price advantage against Indian competitors for some common grades, but the gap has narrowed in tandem with the rupee losing value against the Vietnamese currency, the dong.
On Wednesday, the dollar was trading around 58 rupees, compared with around 53.5 rupees in early May and 56.5 rupees to start this month. It reached a record high of nearly 59 rupees on Tuesday. Since early May, the dollar has gained 8.4 per cent on the Indian rupee and 1 per cent against the dong. The Pakistani rupee has been steady during the same period.
With the Indian Rupee hitting a record low against the US dollar this week, exporters of agricultural commodities, including rice, wheat and cotton, were optimistic that their products may attract price-conscious buyers.
"Already large quantities have been exported. Further, registration of around 300,000 bales has been done in May,” said a leading exporter, which according to him caused spot cotton prices to jump to around Rs 39,700 a bale.
In the domestic market, prices have risen in the past month to Rs 41,000 a candy (356 kg), from Rs 39,500.
Domestic cotton prices have risen by four per cent to five per cent over the past month as supply tightened toward the end of harvesting season, but the rupee weakness has negated the rise in domestic prices.
Exports of cotton yarn are picking up, as China—the world's largest importer of the textile-making material—has started buying after a gap of three or four months.
India's weather department has forecast that monsoon rainfall will be in line with the 50-year average this year, which indicates well for production of crops ranging from rice and wheat to oilseeds.
Assuming production is in line with the weather forecast; India could start exploring new markets for its agricultural products in the European Union as well as Japan. (KNN)
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