Strong indications of increased cotton yarn exports to China are expected to boost sentiments in the Indian cotton yarn and cotton markets. Cotton prices are expected to remain up in the coming months. Cotton yarn is also likely to find support in the domestic market. Imports of cotton yarn by China during January 2015 have increased. The import volume of cotton yarn in January 2015 into China increased 20.41 per cent on an annual basis. China’s imports rose 5.5 per cent compared to December 2014.

India has a 32.28 per cent share of cotton yarn in the Chinese market, the largest. India is followed by Pakistan (27.03 per cent) and Vietnam (18.54 per cent). India expects February and March exports to China to improve further. Cotton prices are ruling higher in China compared to India, so Indian cotton yarn is competitive in the Chinese market. Textile mills in China prefer Indian cotton yarn to keep their cost of production under control.

Traders in India are expecting cotton yarn prices to improve from next month. Anticipation for better exports and summer demand from local mills can boost market sentiments. Local mills are buying yarn to meet their immediate demand. Heavy arrivals of cotton are likely to push prices lower but they would prefer buying for a longer period of consumption.