Virus threat and Indian cotton export targets

The outbreak of coronavirus, which spread from China to over a dozen countries, is likely to pose a major threat to the overall apparel supply chain. However, the Cotton Association of India (CAI), the apex trade body, said that it will not create any threat to India’s cotton exports as India’s rates are competitive in the international market and the exports can be diverted from China to other markets.

The apex trade body said there are no specific concerns.“On the export front, we are doing good and there is no concern over China virus scare. Exports are going on smoothly and we have so far exported about 600,000 bales (each of 170 kg) to China. Total exports stand at about 22 lakh bales, which means we will be able to achieve our export target very comfortably,”said Atul Ganatra, President, CAI, told BusinessLine.

The CAI in its latest estimate has projected exports for the season (October 2019 to September 2020) at 42 lakh bales. One of India’s largest cotton exporters, Kotak Commodities, has indicated that even if China remains a concern area, there would not be much impact on India’s cotton exports.

Vinay Kotak, Director, Kotak Commodities, said,“There is some concern on the China virus. But if this virus problem is resolved within 10-15 days, then there will be no issue. However, even if the China concerns remain, we may be able to achieve our export targets. Currently, Indian cotton is cheapest in the world so we may be able to gain some extra share in our other existing markets.”

The existing markets include Bangladesh, Vietnam, Indonesia and Taiwan.

The cotton rates in India is currently hovering at around₹39,500-40,000 per candy (each of 356 kg of ginned cotton), whereas the international rates are quoting around₹46,000, which clearly indicates an advantage for Indian cotton in the global markets.