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India bans cotton exports, textile firms tense
Apr '10
India announced that the country suspended registration of cotton exports starting from April 19, till further notice. Some analysts believe that China's textile companies will have to look for other sources, which could also turn to be more expensive.

Cotton imported from India had in recent months become the largest source of China's overall cotton imports and this ban on exports by India, will in turn create a tense situation on demand and supply.

In the current cotton season, China's cotton supply gap is to the extent of 3.2 million tons or more and imports in the next season are expected to outstrip inward shipments in the current year, as demand is expected to peak, following recovery in global markets.

Experts are also of the opinion that, following India's decision, Chinese textile firms will have to shell out higher prices in the global markets, due to the shortage created in global markets, which could in turn cut into the profits of these companies.

Fibre2fashion News Desk - China

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