JANUARY 12, 2018
MUMBAI (Reuters) - Indian cotton traders have cancelled contracts to export some 400,000 bales of the fibre after a rally in domestic prices and the rising rupee made overseas sales unattractive, the president of the Cotton Association of India told Reuters.
The switch, triggering penalty payments by traders, has left cotton buyers in leading markets like Bangladesh, Vietnam and China seeking to make up shortfalls by tapping suppliers in the United States, Australia and Brazil, said association head Atul Ganatra.
The cancellations and higher local prices could cut India’s exports to 5 million bales, each of 170 kg, in the 2017/18 marketing year started on Oct. 1 - nearly a quarter below an initial estimate, Ganatra said. Prices surged more than 15 percent in the past six weeks after pest infestations squeezed supplies in the world’s biggest producer of the fibre.
“Some exports contracts for Bangladesh, Vietnam and China could not be fulfilled due to the sudden rise local prices,” Ganatra said. He didn’t identify the traders who cancelled export deals in moves confirmed by six dealers contacted by Reuters. (Source: in.reuters.com)