Global cotton buyers turn to India as storms dampen US production

Hurricanes Harvey and Irma have caused widespread damage to cotton-cultivating states, affecting the North America country's production.

October 05, 2017

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Hurricanes Harvey and Irma have caused widespread damage to cotton-cultivating states, affecting the North America country's production.

Global cotton buyers are turning to India after fierce storms ravaged key producing areas in the US, affecting the volume and quality of the crop coming from the North America country. The nation is the world's biggest exporter of the fiber, with India ranking second.

In the weeks after the hurricanes hit the US, cotton growers in the South Asia country sealed deals to ship about a million bales to Greater China, Vietnam, Bangladesh, Indonesia and Pakistan, which are key garment suppliers to major brands and retailers, including H&M, Zara and Wal-Mart.

Before the storms, volume was at 300,000 bales.

Exporters are optimistic that strong demand will continue in the next few months, helping India's cotton shipments to jump about 25 percent in the 2017-18 season starting this month.

Hurricanes Harvey and Irma have caused widespread damage to the crop from major cotton-producing states such as Texas and Georgia. In the former, an estimated 500,000 to 600,000 bales have been wiped out by the storms.

According the US Department of Agriculture, the country exported more than 80 percent of the cotton it produced last year, with about 70 percent going to Asia.

Brazil and Australia, other major cotton-producing nations, could benefit from lower supplies from the US. The countries, however, may find it difficult to match the price offered by India, where a bumper harvest is likely to keep quotes lower. The South Asia country is also the world's largest producer of the crop.

India's farm ministry records revealed a total of 12.1 million hectares planted with cotton for the 2017-18 season. This was up 19 percent from the previous year. Experts predict growers to harvest a record 40 million bales in this season, which could bring domestic prices down and making exports more competitive.

In the 2016-17 season, India harvested 34.5 million bales, selling 6 million bales in the global market. The amount is expected to reach 7.5 million bales this year. Some traders believe exports could exceed 8 million bales if China, the world's biggest cotton consumer, steps up imports this season.

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