India's cotton exports soar 137%, buoyed by competitive prices

India's cotton exports have witnessed a stellar rise of 137 per cent in the first half of the 2023-24 season (October-March). This jump, from 7.59 lakh bales to 18 lakh bales, is attributed to two key factors: competitive pricing and high demand from major buyers like Bangladesh and Vietnam.

Indian cotton's affordability in the international market significantly boosted exports. For a period, Indian prices were Rs 3,000-4,000 per candy lower than global rates, making it an attractive option for multinational companies (MNCs). These MNCs, including Louis Dreyfus Company, Viterra, and Olam, capitalized on this by offloading their cotton stocks in India.

While initial competitiveness gave India an edge, recent weeks have seen a shift. Global cotton prices have eased, bringing Indian prices closer to or slightly exceeding the Cotlook Index, a benchmark for cotton prices.

Despite these price movements, demand from key markets like Bangladesh and Vietnam remains robust. These countries value the competitive pricing and faster delivery times offered by India.

Interestingly, domestic cotton consumption in India has also shown an increase despite price fluctuations. Consumption is estimated at 165 lakh bales till March, and the projected domestic offtake for the entire season (ending September 2024) stands at 317 lakh bales.

India's cotton sector demonstrates resilience, with stable domestic consumption and strategic maneuvers by MNCs. The Cotton Association of India (CAI) estimates healthy cotton supply within the country. This, coupled with the positive performance so far, indicates a promising future for India as a major player in the global cotton market.