By admin       2017-09-18

Mumbai, Sept. 17 (Reuters): The world's top cotton buyers, all in Asia, are flocking to India to secure supplies after fierce storms in the US, the biggest exporter of the fibre, affected the size and quality of the crop, dealers said.In the past week alone, India, the world's second-biggest cotton exporter, sealed deals to sell about a million bales to China, Taiwan, Vietnam, Pakistan, Bangladesh and Indonesia - key garment suppliers to brands such as H&M, Zara and Wal-Mart Stores Inc.That compared with 300,000 bales in the two weeks before.Dealers expect contracts similar to last week in the next few months, which could help India's exports grow by a quarter in the 2017-18 season beginning October.Indian cotton has great chances this year," said Chirag Patel, chief executive at Jaydeep Cotton Fibers Pvt Ltd, a leading exporter. Asian "buyers are switching to Indian cotton from the US."Hurricanes Harvey and Irma caused widespread damage to the crop in Texas and Georgia, major cotton producing states, with the effects more widespread in Texas, dealers said.We definitely lost cotton in Texas. It wiped out 500,000-600,000 bales,"? said Peter Egli, risk manager at Plexus Cotton Ltd, a Chicago-based merchant, referring to the impact of Harvey in the top-producing US state.In 2016, the US exported 86 percent of its cotton, 69 percent of which went to Asia, according to the US Department of Agriculture.Other cotton producers like Brazil and Australia could benefit from lower supplies from the United States, but may find it difficult to match the price offered by India, where a bumper harvest is likely to keep the rates lower.Traders in India, also the world's biggest cotton producer, signed their export deals at around 80 cents per lb on a cost and freight basis, nearly 2 cents lower than the supplies from the US, dealers said.India could soon sell at lower prices.Farmers are likely to harvest a record 40 million bales of cotton in the 2017-18 season beginning Oct. 1, 2017, bringing domestic prices down and making exports even more competitive, Patel said.For the new 2017-18 season, farmers have planted 12.1 million hectares with cotton, up 19 percent from a year earlier, farm ministry data showed.India harvested 34.5 million bales of cotton in the 2016/17 season.Favourable crop conditions would help India sell 7.5 million bales of cotton on the world market in 2017/18 against 6 million bales in the previous year, said Nayan Mirani, partner at Khimji Visram & Sons, a leading cotton exporter.Some traders believe that India's exports could surpass 8 million bales if China, the world's biggest cotton consumer, steps up imports in 2017/18.Beijing, which began selling cotton from its reserves on March 6, had planned to stop the daily auctions at the end of August. But it extended the sales for an additional month after local prices rose amid tighter supply, indicating the need to replenish falling inventories.A Mumbai-based dealer with a global trading firm company said he had received a flurry of orders in the past few weeks, especially for December quarter shipments. He declined to be identified because he was not authorised to talk to media.Hobbled by the rising rupee and unattractive global prices, India was struggling to sign export deals until a few weeks ago. But a recent rally in global prices made overseas more sales competitive.Other than attractive prices, close proximity encouraged most Asian buyers to turn to India. While cargoes from the US take about 50 days to reach Vietnam, Bangladesh and Pakistan, India can ship its cotton in two weeks.India's new season crop will be available to buyers from October, but the supplies from the US will reach consumers only in January, said Mirani of Khimji Visram, a top exporter.Current market trends give cotton buyers a chance to look at alternative supplies, said Vu Duc Giang, chairman of Vietnam Textile and Apparel Association.But forecasts of higher global output will ease concerns over cotton supplies, Giang said.The US Department of Agriculture this week said US cotton output is seen at 21.76 million bales for 2017/18 compared with 20.55 million bales projected last month.

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