India’s cotton exports in 2016-’17 are likely to fall 28 per cent from a year ago. One reason is that Pakistan may halve its purchases. Pakistan is likely to import one million to 1.5 million bales in 2016-’17 down sharply from 2.7 million bales a year earlier. Pakistani buyers are turning to Brazil, the US and some African countries.

Pakistan is the world’s third largest cotton consumer. In 2015-’16, Pakistan surpassed Bangladesh to become India’s biggest cotton buyer and accounted for 40 per cent of exports. India has so far contracted 5,00,000 bales for export. Demand is weak from overseas buyers. By this time last year, Indian traders had signed contracts to export a million bales.

India’s cotton output in 2016-’17 could rise 3.8 per cent from a year earlier as yields are expected to increase due to good monsoon rains. This year, the area under cotton was lower but due to good monsoon rains and less impact from pests, the country is estimating higher per hectare yields.

Another reason for the fall in cotton exports from India was that domestic cotton prices were on the upside since April. During June and July this year, Indian cotton prices were higher than international prices.