US cotton exports to India rise on decrease costs, tariff uncertainties, ETCFO
U.S. upland cotton exports to India have risen previously few months fueled by international tariff conflicts, declining American costs and rising demand within the South Asian nation, trade consultants stated.
Exports to India from February to April jumped to 155,260 working bales, from 25,901 shipped throughout a yr in the past interval, in accordance with the U.S. Division of Agriculture’s (USDA) information. The exports hit an over 2-1/2-year excessive within the week of February 20.
The rise comes as Washington-Beijing commerce tensions escalate, lowering U.S. cotton exports to China. China will impose 125% tariffs on U.S. items, up from the 84% beforehand introduced, the finance ministry stated on Friday.
With these tariffs and a drop in China’s demand, upland cotton grown in Texas and different areas is now discovering a market in India, in accordance with Ajay Kedia, director of Kedia Advisors.
On the identical time, exports to China are anticipated to lower, stated Justin Cardwell, head of analysis and expertise at Various Possibility.
India is the world’s second-largest cotton producer after China, in addition to one of many world’s largest cotton yarn processors and exporters. Nevertheless, declining yields have lately turned the nation from a web exporter to a web importer of the fibre.
India primarily imports Additional Lengthy Staple (ELS) cotton from the U.S., benefiting from a ten% obligation exemption, in contrast to brief staple cotton which has an 11% import obligation.
“The U.S. ELS cotton stays cost-effective for a lot of Indian patrons resulting from its greater ginning effectivity, higher lint yield, and superior fibre high quality,” stated Kedia.
The Cotton Affiliation of India (CAI) this yr lowered its cotton manufacturing estimate by 250,000 bales to 30.1 million bales, marking a 7.84% drop from the 2023-24 season.
ICE cotton futures have dropped practically 5% up to now this yr.
India may see a cotton shortfall of two.5 million bales this yr, a niche that might be bridged with elevated imports, stated Y. G. Prasad, director of Central Institute for Cotton Analysis.
India’s cotton imports in 2024/25 are anticipated to double resulting from falling manufacturing, in accordance with the CAI. India additionally imports cotton from Australia, Brazil, and Egypt.
