Further shipments may be affected as importers turn reluctant.

The quality of Indian cotton has emerged as a major issue in the export market with importing nations becoming reluctant to purchase the natural fiber from India, according to trade and industry sources.

“Due to poor quality of Indian cotton, importing nations are a little hesitant to buy from us,” said an upcountry trading source, not wishing to be identified.

This, in turn, can slow down exports that are projected at 75 lakh bales (of 170 kg each) by the Committee on Cotton Production and Consumption, a body of all the stakeholders in the cotton industry.

A trader from the western part of the country said that the Cotton Corporation of India (CCI) has been left holding 51 lakh bales of cotton procured this season due to the fibre being slightly yellow in colour. Similarly, Maharashtra State Cooperative Cotton Growers Marketing Federation (MSCCGMF) has not been able to sell at least six lakh bales it procured from the growers due to the same issue.

CCI denies

CCI and MSCCGMF had procured cotton under the minimum support price (MSP) scheme from the farmers, mainly during the early part of the current season (October 2020-September 2021). For this season, the Centre has fixed the MSP for cotton at ₹5,515 a quintal. At least 100 lakh bales have been procured by these agencies.

When contacted by BusinessLine, CCI Chairman-cum-Managing Director PK Agarwal denied there were any quality problems with cotton exports. “We have the best quality cotton with us. We bought the fair average quality cotton from the growers and whatever we did not procure were bought by other traders,” he said. Southern India Mills Association (SIMA) Secretary-General K Selvaraju said that cotton has quality issues this season, particularly with its colour, following unseasonal rains during October-November last year.

“The CCI was strict in ensuring that the cotton it procured this year adhered to the FAQ norms. Some private traders bought cotton below these norms at a price ₹500-700 a quintal lower than MSP. Last year’s cotton was of better quality than this year,” the SIMA official said.

The trader from the western part said that CCI did not have any problem in selling 45 lakh bales of the fibre with it from the previous season. “This year, the unit of colour reflectance (Rd) is lower in the current season’s stocks as rains have affected the colour,” he said. The Rd level is an indicator of cotton’s witness and a lower level means the fibre’s colour is a bit yellowish, probably on account of rainwater seeping in it.

“There seems to be no problem with either the micronaire or staple length. The issue is over cotton’s grading, basically due to the colour,” the trader said.

Prices drop

Trading sources said that due to quality issues, the CCI had lowered its offer prices for export last week, though one source put the cut due to a drop in New York price, which serves as the benchmark.

According to the Gujarat Cotton Trading Association, Shankar-6 cotton, the benchmark for exports, quoted at ₹45,100-45,500 a candy (of 356 kg) on Tuesday compared with ₹45,900-46,200 a week ago.

In New York, cotton prices are currently quoted at 84.32 cents a pound (₹48,350 a candy) against 86.13 cents (₹49,400) last week. In the domestic market, raw cotton or kapas prices have dropped by ₹150-200 a quintal since last week to ₹6,050-6,250 in Rajkot district agricultural markets.

CCI’s Agrawal said cotton exports this season would be between 70-75 lakh bales, up from projections of 65-70 lakh bales made last month.

The Cotton Association of India projected exports at 60 lakh bales earlier this month. Last season, exports were 50 lakh bales.

“Exports will be around 50-55 lakh bales in view of the problems that are reported on quality,” said SIMA’s Selvaraju. During the current season, 46 lakh bales have been exported until last week with most of the shipments heading to Bangladesh, China, Turkey and Vietnam.

Source: businessline