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India's cotton exports skyrocketed by 137% in the October-March period of the 2023-24 season, reaching 18 lakh bales, driven by competitive pricing and strong demand from key markets like Bangladesh and Vietnam. Multinational companies have capitalized on India's competitive domestic prices, while global price dynamics have seen fluctuations. Despite this, domestic consumption has remained stable, signaling a robust outlook for India's cotton sector.

Highlights

Cotton exports surge: India's cotton exports have experienced a significant increase of 137% in the October-March period of the 2023-24 season, totaling 18 lakh bales compared to 7.59 lakh bales in the same period last year.

Competitive pricing: Competitive pricing in the international market has contributed to India's higher cotton exports, with Indian prices being lower by ?3,000-4,000 per candy compared to international prices for a certain period.

Global price dynamics: While Indian prices were competitive initially, recent weeks have seen global prices ease, bringing Indian prices to par or slightly higher compared to the Cotlook Index.

Strong demand from key markets: Countries like Bangladesh and Vietnam continue to exhibit strong demand for Indian cotton, driven by competitiveness and faster delivery.

Multinational offloading: Multinational companies such as Louis Dreyfus Company, Viterra, and Olam are aggressively offloading their cotton stocks in the Indian market, capitalizing on competitive domestic prices.

Price movements: Cotton futures on ICE have declined from 102 cents per pound to around 80 cents, while domestic prices have also decreased from ?61,000 to around ?58,000 per candy during the period.

Stable consumption: Despite fluctuations in prices, consumption in the domestic market has seen an increase, with consumption estimated at 165 lakh bales till March and projected domestic offtake for the year ending September 2024 at 317 lakh bales.

Supply estimates: The Cotton Association of India (CAI) estimates total supply in the country till March end at 297.03 lakh bales, with stocks at the end of March 2024 estimated at 114 lakh bales, including 47 lakh bales with textiles mills and 67.03 lakh bales with Cotton Corporation of India, Maharashtra Federation, and trade.

Conclusion

India's remarkable surge in cotton exports underscores its growing prominence in the global market. The competitive pricing strategy and strong demand from key markets have propelled India to the forefront of cotton trade. While global price fluctuations pose challenges, stable domestic consumption and strategic offloading by multinational companies highlight the resilience of India's cotton industry. With a promising outlook for the remainder of the season, India is poised to maintain its position as a key player in the global cotton market.

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