India trims cotton output estimate, export scope dims

India has revised downwards its cotton output estimate for 2010/11 by more than 5 percent, due to untimely rains, industry officials said on Tuesday, dimming chances of exports topping the currently permitted 5.5 million bales.
Overseas demand for cotton from India, the world's second-biggest producer, rose after bad weather hit crops in China and Pakistan, both leading markets for the fibre.
The latest estimate of the Cotton Advisory Board (CAB) put India's output from the harvest at 31.2 million bales in 2010/11, lower than the previous estimate of 32.9 million bales, but still 5.8 percent higher than the year-ago period which was hit by drought.
CAB comprises textile stakeholders including the government, cotton growers, industry associations, traders and ginners. India's cotton output forecast is reviewed periodically. India had allowed 5.5 million bales for exports from October 1, but shipments could not be met as rains hit harvest. An initial deadline was extended until February 25 for 1.7-1.9 million bales that went unshipped. That backlog is now being cleared.
"There will not be more cotton exports from India to the world market beyond what have been permitted," said D. K. Nair, secretary general of the New Delhi-based trade body Confederation of Indian Textile Industries. The closing stock of cotton was placed at 2.75 million bales, said the latest Board estimate, much lower than its stock estimate of 4.05 million bales in January.
Strong demand from China and the supply crunch from India are seen pushing the US cotton futures for a second straight day on Tuesday amid continued buying support from investors. The key May cotton contract on ICE Futures US rose the 7.00-cent limit to trade at $1.9823 per lb in early Asian trade, while China's Zhengzhou cotton gained almost 5 percent to trade around 33,100 yuan per tonne.
Nair also said domestic cotton supply would be under stress as result of the downward revision in production, which would push prices of the fibre up. In India, price of the most common variety hit a record high of 60,000 ($1,331.6) rupees per candy in February.