India’s cotton exports are estimated to touch 7.5 million bales for 2017-18 (October to September is the period of active cotton production) and it will be highest after 2013-14. Abnormal weather conditions in major cotton-producing countries as the US and China along with a sharp rise in international cotton prices has improved India’s forecast for cotton exports.
Currently, the free on board (FOB) price of cotton being exported is 83.78 cents against the US benchmark ICE traded cotton price of 89-90 cents. Moreover, monthly cotton yarn exports were a record high at 158 million kg in March, the highest since December 2016.
Besides, exporters’ margins have also increased to a record high. Such a high margin was never recorded before, which has been preferred as a proxy to cotton because of the country’s inferior cotton crop quality in the season following a pink bollworm attack.