Domestic cotton prices are on the upside since April, due to expectation of weak production. This has affected exports, mainly to Pakistan. In the current cotton year (it runs from October of one year to September of the next), about 37 per cent of exports have been to Pakistan. However, with prices moving up to Rs 50,000 a candy (356 kg), this is being hit, says the trade.

“China is the major buyer for Indian cotton but this year's demand was not so good. Against it, due to crop failure, Pakistan became a major importer. However, if our prices were lower, our overall export might be higher than it has,” said J Thulasidharan, president of the Indian Cotton Federation.


As per reports, Pakistan is looking at other options such as the US to import cotton. Even Indian experts believe that. So far, India has exported about 2.5 million bales to Pakistan only out of the total exports of 6.8 million bales.

"During June and July this year, Indian cotton prices were higher than international prices. While buyers are getting cheaper cotton from others why one should buy at the higher rates. However, all depends on demand. There was a good demand from Pakistan this year but after prices gone up, this has affected the export from India," said Naveen Mathur, associate director of commodities and currencies business at Angel Broking.

Because of high cotton prices in domestic markets, many mills from South India are importing from West Africa. According to industry sources, India has imported about two million bales of cotton during this year so far.

Thulasidharan said: "Higher domestic price also increased the cotton import this year as stock size in India is less. This has forced the domestic mills to import cotton. So far India has imported about two million bales and it may increase further.

Sources ;business-standard.com