Already China is the top market for India’s overall export growth in recent months. The exports of India to China have grown an average 52.9 percent year-on-year, between April and August, if it is compared with 14.7 percent to the U.S., 11.9 percent to the UAE and 12.6 percent to Europe, as per the report published by the Mint newspaper.
Economists believe that Soybeans are at the heart of the trade war between the U.S. and China and cotton isn’t far behind. This puts India in a position to step up and fill the gap left by the U.S.
Growth in exports to China has seen India’s trade deficit with the Asian giant shrink, although the gap widened on an overall basis. Also along with a slowdown in foreign capital inflows, has led to concerns that the current-account deficit will widen, has prompted Finance Minister Arun Jaitley to hint at more measures to curtail the gap.
It is expected that India’s cotton exports will jump 43 percent to 10 million bales in the 2018-19 marketing year on strong overseas demand, mainly from China. In a year, 2017-18, in general, cotton shipments are likely to cross 7 million bales in the ongoing marketing year. Till May 2018, already 6.2 million bales have been exported. According to reliable sources, the demand for Indian cotton is high as prices are almost 10 % lower than the international prices. The President of the Cotton Association of India, Atul Ganatra also informed about the same. He also went on saying that the Indian cotton is quoted at Rs 46,500 / bale in the spot market, which is very much lower than Rs 54,000 / bale in the US and Rs 58,000 / bale in Australia.
Hence, China, which is the world’s second-largest producer, has signed an advance contract for 5 lakh bales of the new cotton crop from India. This will be delivered in November-December of the 2018-19 marketing year. It is expected that in the next marketing year, total cotton exports to China could increase to 30-40 lakh bales from 10 lakh bales this year. Till May of this marketing year, 6.2 million bales were undertaken