India is likely to export 7 million bales of cotton in 2018/19, down 30 percent from an earlier estimate, as scanty rainfall and an attack of pink bollworms are likely to squeeze crop yields, the head of a leading trade body told Reuters.
Lower shipments from the world’s biggest producer of the fiber amid rising demand from top consumer China could support global prices, which on Monday were trading near their lowest level in over four months.
A drop in planting area and the pest attack will limit overseas sales to 7 million bales in the marketing year starting on Oct. 1, down from 7.2 million bales in the current crop year, said Atul Ganatra, president of the Cotton Association of India.
“In Gujarat and Maharashtra, rainfall was lower than normal. In some pockets, pink bollworm attacks have also been reported,” said Ganatra, who had forecast exports of 10 million bales in June.
India’s western states of Gujarat and Maharashtra account for more than half of the country’s total cotton production.
Some regions of these two states received as much as 22 percent less rainfall than normal, according to data compiled by India Meteorological Department.
Indian farmers have adopted genetically-modified seeds known as Bt cotton that are resistant to bollworms, but it hasn’t stopped the infestations.
Pink bollworms consume the fiber and seeds inside a cotton plant’s boll, or fruit, and yields fall.
Export demand for shipments in 2018/19 is robust but we could not sign deals due to uncertainty over crop size, said a Mumbai-based dealer with a global trading firm.
Local cotton prices will rally if production drops substantially and will make it difficult for us to fulfill commitments, the dealer said.
Pakistan, China, Bangladesh and Vietnam are key buyers of Indian cotton.