Drought pushes cotton imports to all-time high.

PUNE: India is set to register its highest cotton imports in 2015-16 as domestic supplies have dwindled due to two consecutive droughts in the country, trade sources said.

India is likely to import more than 15 lakh bales (each of 170 kg) of cotton as against the previous import high of 14.6 lakh bales in 2012-13.

"We are going to import record cotton this year," said Atul Asher, secretary at Indian Cotton Federation. "It will be more than 15 lakh tonne."

Traders said 7-8 lakh bales have already been imported and that the total imports could go up to 18 lakh bales.

Projection of decline in cotton acreage, lower sowing acreage in Gujarat coupled with tight supplies in the physical market added to the bullish sentiments in the market. India's cotton production in 2015-16 is expected to decline to 338 lakh bales from 386 lakh bales, a fall of more than 12 per cent.

According to India Ratings and Research, profitability of ginners and spinners is expected to see a 15 per cent fall due to a sharp rise in cotton prices.

The government has asked Cotton Corporation of India (CCI) to sell its stock to the medium, small and micro enterprises (MSME) as prices have increased substantially since June. "After hitting Rs 50,000/candy, cotton prices have started declining," said AK Mishra, chairman at CCI.

CCI has about 25,000 bales to offer to the MSME sector. After good rains and softening of international prices, domestic cotton prices have declined by aboutRs 3,000/candy and are now ruling at about Rs 47,000/candy.

Source : economictimes.indiatimes.com