India's cotton yarn exports have been hit in the past few months. High prices have made the product uncompetitive in the overseas market. Cotton yarn exports declined 36 per cent on year in April to August while in value term exports were down nearly 39 per cent. There are other reasons as well for the slowdown in yarn exports. Orders with China’s weaving, knitting, and garment factories have been drying up due to the ongoing trade war with the US. This has had a cascading impact on the textile sector in Bangladesh, which has been the top destination for Indian cotton and yarn. The subdued demand has dragged prices of yarn below the cost of production in India that hit exports. Similarly, demand from Indonesia and Vietnam has also fallen for the same reason.

However, as cotton prices are set to fall with arrivals of the new crop, Indian yarn too may be back in the game from November. Enquiries from overseas importers have started coming in and probably in November Indian companies should start exporting cotton yarn. However, resumption of exports will reduce only half of the backlog so far. The country’s exports will be down 15 per cent to 20 per cent by the end of March from the current 36 per cent decline in volumes.