* Rupee's 4.8 pct rise in 2017 makes imports competitive
* Imports seen at 3 mln bales vs 2.2 mln bales yr ago
* Exports falter as Indian cotton becomes expensive
By Rajendra Jadhav
MUMBAI, March 31 India's 2016-17 cotton imports
are set to jump more than a third from a year ago to a record 3
million bales as the rupee's rise makes buying overseas cheaper,
senior industry officials and executives said.
The strong rupee - now at its highest level in 18 months -
has also braked cotton exports from the world's biggest producer
of the fibre, a trend that has helped rival suppliers in Brazil,
the United States and some African countries boost their own
"Usually (textile) mills in southern India import cotton,"
said K. Selvaraju, secretary general of the Southern India
Mills' Association (SIMA), in a recent interview. "This year
mills from even the north are importing. Overseas supplies have
become competitive due to the strong rupee."
India's currency has risen 4.8 percent so far in 2017 versus
the U.S dollar. Indian mills have contracted to import around
1.5 million bales and another 1.5 million bales will be imported
by end of the current crop year, ending Sept. 30, Selvaraju
That total of 3 million bales would be 36 percent more than
the 2.2 million bales imported in the 2015-16 crop year, with
stocks coming mainly from African countries, the United States,
Brazil and Australia.
Tightness in domestic supply is also boosting imports, as
Indian farmers hold off on deliveries in the hope of achieving
higher prices later in the crop year.
Usually Indian mills import cotton in the second half of the
crop year as domestic supplies dwindle. But this year they began
importing in January as local prices jumped due to limited
supplies, said Chirag Patel, chief executive of Indian exporter
Jaydeep Cotton Fibers.
The state-run Cotton Advisory Board has forecast production
of 35.1 million bales in the current crop year, but industry
officials say production is likely to be around 34 million bales
as output was hit in southern states of Andhra Pradesh and Tamil
Nadu by a drought.
The rampant rupee has also dented cotton exports from India.
"Because of currency fluctuation right now Indian cotton is
not competitive in the world market," said Jaydeep Cotton
Fibers' Patel. "Traders want to export but they couldn't sell."
The country has so far contracted to export 4.5 million
bales in the current crop year, and total exports in the season
could be around 5 million bales, down 30 percent from a year
ago, he said.
Pakistan, Bangladesh, China and Vietnam are key buyers of
(1 Indian bale = 170 kg)
(Reporting by Rajendra Jadhav; Editing by Kenneth Maxwell)