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India’s cotton exports may witness a temporary slowdown as the spread of coronavirus

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Exports of around 2,50,000 cotton bales from India to China, for which deals were signed in January, have been put on hold as concerns over the spread of coronavirus have intensified. These deals will be settled mutually if the situation is not brought under control soon. India’s cotton exports may witness a temporary slowdown as the spread of coronavirus is likely to curtail demand for the fiber. In January, Indian exporters signed deals to export 7, 00,000 to 8,00,000 bales of cotton, of which 4,00,000 or 500,000 bales or 60 per cent were meant for China, and the rest for Bangladesh and Vietnam. After the uncertainty in China, cotton exporters in India are anxious to sign up for new consignments with China. Trading has resumed at financial markets in China, the second largest economy, after an extended holiday for the Lunar New Year.

Strong orders from other countries and lower domestic prices have made sales economically viable. Indian cotton is offered at prices lower than crop from west Africa and the US. So finding new buyers won’t be difficult. India’s overall exports might touch five million bales mainly due to strong orders from other importing destinations like Bangladesh, Vietnam and Indonesia.