India's cotton exports soar to two-year high as global prices spike.

India's cotton exports are poised to soar to their highest level in two years in February, driven by a rise in global prices that has rendered Indian cotton particularly appealing to Asian buyers. Previously, these buyers primarily sourced cotton from Brazil and the United States.

However, with recent rally in global prices, India, the world's second-largest cotton producer, has become a more attractive option. Traders report in February alone, contracts were signed to export 400,000 bales (68,000 metric tons) of cotton, marking the highest volume since February 2022. The primary destinations for these exports are China, Bangladesh, and Vietnam.

Atul Ganatra, President, Cotton Association of India, noted Indian cotton is now highly competitive, boasting the lowest prices globally, which has significantly stimulated export demand. It's projected that India could export two million bales in the marketing year ending on September 30, surpassing initial expectations of 1.4 million bales. Some traders even anticipate exports reaching 2.5 million bales, given that Indian cotton is priced 6 to 7 cents per lb cheaper than US supplies.

Aggressive buying from China has further bolstered US cotton prices in recent months, with Beijing now turning to India for purchases. Vinay Kotak, Director, Kotak Ginning and Pressing Industries, highlighted India's advantage in pricing and freight costs compared to the US and Brazil, owing to its proximity to importing countries.

However, despite robust demand, India's export potential may be limited due to a projected 7.7 per cent decline in cotton production this year, according to the Cotton Association of India.