Driven by increased demand from China, lower domestic prices and depreciation of the rupee, India’s forward export contracts of cotton have more than doubled from about seven lakh bales in September 2017. The Cotton Association of India has signed export contracts for 14-16 lakh bales (of 170 kg each). About 75 per cent of these contracts are for export to China.

In 2017-18, India could not sign as many forward contracts since cotton availability was restricted. This year, traders are upbeat because Indian cotton is the cheapest in the international market and demand from China is looking up. This financial year however, exports are likely to increase despite expected projections of tight supplies and increase in minimum support price (MSP) by the government.

Bangladesh and Vietnam are the other buyers that have signed some forward contracts for Indian cotton. Indian traders export maximum quantities of cotton in November and December since India is the only country where cotton is available at that time.