Apart from Australia, many players intend to buy cotton from Africa, as the central government has implemented a policy that reduces import duties by half for imports from developing countries.
"India's cotton crop is estimated to be more than 340 lakh bales," said Jayesh Patel, vice-president of Spinners' Association Gujarat (SAG).
Arrivals have remained slow this year, though, because many farmers have not sold their full harvest in anticipation of higher prices. He stated that Indian cotton prices have stayed higher than international cotton prices. "Our cotton imports from Australia increased significantly last year, and we expect around 2.50 lakh duty-free bale imports in the next three months this year as well."
"Importers have placed orders, and shipments will begin soon," Patel added. Australian cotton has a low moisture content, which allows spinners to achieve higher realization for Australian cotton yarns. Spinners also pay a premium for Australian cotton yarn because it is free of contamination. According to industry insiders, the Gujarat-based spinning mills will receive a large percentage of the Australian cotton.
In 2022, India's cotton imports from Australia will be USD 283 million, more than four times the previous year's total. Last year, the Indian textile sector imported almost 4.75 lakh bales of cotton, which was more than 2.5 times greater than the previous year. According to Bharat Chhajer, former chairman of the Powerloom Development and Export Promotion Council (PDEXCIL), "the textile industry is considering importing cotton from African countries as well."
The central government recently announced a reduction in import duties for imports from developing countries. This means that cotton from various African countries can be imported with a 5.50% import charge. Indian cotton prices have remained stable, and traders are considering importing cotton from Africa." Cotton prices in India reached a historical high of Rs 1.10 lakh per candy (356kg) last year, and are today about Rs 61,500 per candy.
