The 2016-17 cotton marketing year (October to September) ended with exports at 6.74 lakh bales (excluding waste) valued at US$1,996 million or INR13,175 crore. Shipment showed a 6% increase over previous season while value surged 27%. This was largely due to 20% increase in price (weighted cotton fibre consignment during the year, led by Mundra and JNPT accounting for 85% of all cotton exported from India in 2016-17. They were distantly followed by Petrapole Road and Pipavav ports.

Peak season shifts and extends

A noticeable shift was seen in peak shipment activity during 2016-17, and this was due to demonetisation of high value currency notes with effect from 9 November. Normally, peak shipment season prevail in between November- February and later tapers off. This year, the activity peaked in December and extended up to May when 79% of the shipment was done. In the previous season of 2015-16, 78% of the shipment was completed between November and March. Thus, the impact of demonetisation was clear visible on both, export volume and prices – which remained unusually high across the season.

Exports at higher price

The year began with export prices averaging US cents 87 per pound and remained very high as the season progressed with similar level seen in July 2017. They remained below Cotlook ‘A’ index for most part of the year by about US cents 2-5 having widened to US cents 10 in May. Compared to spot prices (Shankar-6), export prices were slightly below for most months. Comparing simple monthly averages of key price indicators Cotlook ‘A’ (US cents 83 per pound) and Shankar-6 spot rate (US cents 81 per pound) of Cotton Association of India during 2016-17, pegs export average price (US cents 81 per pound) up 13% year on year while Cotlook rose 15% and spot rates by 14%. Thus, export price realization has been healthy in line with key indicators, despite month on month variations. The surge in prices this season was largely due to farmers resistance to sell crop in transactions using banking system due to paucity of cash. Hitherto, a large portion of trade was done in cash, and the sudden overnight policy pronouncement had caught buyers and sellers by surprise with no option of than using banking transactions.

Spun yarn export surged to partially recover previous fall

Spun yarn export shipment surged in September 2017, but was only a partial recovery from the significant fall posted in September 2016. Yarn export aggregated 112 million kg in September 2017, up 25% year on year and 26% in value at US$341 million. In September 2015, shipments had totaled 129 million kg worth US$359 million which fell to 90 million kgs or US$271 million in September 2016. Thus, exports in 2017 were still below the 2015 levels.

Unit value realization averaged US$3.04 per kg, down US cents 16 from previous month, but US cents 2 up compared to September 2016. Meanwhile the INR appreciated from INR66 in September 2016 to INR63 this year.

Cotton yarn export at 89 million kg worth US$280 million (INR1,765 crore) rose 26% and 27%, respectively in September. They found markets in 72 countries at an average unit price realization of US$3.13 a kg, US cents 18 less than previous month and US cents 4 up from the same month a year ago.

China increased its import of cotton yarn from India by 70% in value and 63% in volume, followed by Bangladesh and Egypt. During September, 12 countries did not import any cotton yarn from India as they did last year. However, they were replaced by 9 countries which imported yarn worth US$2.25 million.

Israel, Paraguay and South Africa were among the fastest growing large markets for cotton yarn.

100% man-made fibre yarns export was at 8.2 million kg in September, comprising 3.7 million kg of polyester yarn, 3.0 million kg of viscose yarn and 1.4 million kg of acrylic yarn. Polyester yarn exports jumped 42% in value while viscose yarn exports value moderated 5% during the month. Acrylic yarn exports were up 7% in September.

Polyester spun yarns were exported to 45 countries in September with average unit price realization at US$2.25 a kg, down US cents 12 from previous month. Turkey was the largest importer of polyester yarn, followed by Egypt and USA.

Viscose yarn worth US$9.5 million or INR60 crore was exported in September, at an average unit price realization of US$3.16 per kg. Brazil was the top importer worth US$1.75 million, followed by Belgium with imports worth US$2 million.

Blended spun yarns worth US$43 million were exported in September, up 27 per cent YoY in value terms. During the month, 8.4 million kg of PC yarns was exported worth US$22 million. Another 4.9 million kg of PV yarns were exported worth US$14 million.

Brazil and Turkey were the largest importers of PC yarn from India followed by Bangladesh while, Turkey was the largest importer of PV yarns from India followed by Iran.