The new cotton season has begun. India's cotton exports for 2014-15 are estimated at nine million bales, about 23 per cent lower than the previous year’s exports. Two-thirds of India’s cotton exports go to China. But that country is facing a slowdown and the government is pushing for use of higher local material. This year, cotton exports to China are expected to come down by another 35 to 40 per cent. However, India can see good demand from Thailand, Bangladesh and Pakistan.

Vietnam and Thailand have entered cotton spinning and are thus importing more from India. Indonesia, Pakistan and East Asian countries are expected to import a lot more this year. Bangladesh had imported 1.5 million bales last year. Last year, China had imported 6.2 million bales till July.

Export had been at a near-standstill for some time. Four months earlier, India’s cotton prices were 22 cents a pound higher than the global level. This has since dropped and Indian prices are about six cents a pound higher. Export can be higher if Indian prices fall further or global prices rebound but all depends on how the Chinese economy progresses. If it remains slow, cotton demand will not increase.