Worldwide impact of Indian cotton export ban – Special report

07 May '10

7 min read

ICE July cotton futures, an international benchmark, rose 5.7 per cent to 86.20 cents a pound in the week, nearing a 15-year settlement high. For the US, the top exporter, India's move to placate yarn spinners has turned out to be a windfall. Chinese cotton importers will now look upon the US to fill the gaps in supply. According a US cotton exporter, inquires since the day, India imposed the ban have increased enormously.

The impact of this decision on Egypt, the other not so big, but supplier of quality cotton to the global sector will be minimal, since the country has exhausted the cotton inventories in the country. At the same time, it will need to import cotton from other countries to feed the requirements of its textile mills. Imports are set to rise by 19 percent to 500,000 bales in the current cotton season.

But on the other hand, the rising cotton prices are expected to have a fillip on cotton output in the country. Cotton area under cultivation is just 30 percent of the peak witnessed in previous years. However, as per experts that is all set to change now. The country's cotton area will jump by more than one-third to 160,000 hectares in 2010-11, the highest in three years, but, half the area, from that harvested a decade ago.

Fibre2fashion News Desk - India

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