Know About India’s Cotton Trade

Know About India's Cotton Trade

India plays a pivotal role in global cotton production. It is one of the largest cotton-producing nations. With an annual output of approximately 62 lakh tonnes, India holds a prominent position in the cotton industry. This achievement can be attributed to several key factors, including the country’s favourable land and climate conditions and its advancements in human development. In our previous blog, we explored some interesting aspects of cotton production in India. Today, we’ll delve into the dynamics of India’s cotton trade within the nation and in the global market, highlight the most sought-after cotton varieties, and examine the details of import-export activities.

Major varieties of cotton in India

In India, all four species of cotton find their place in the vast landscape of cultivation and commerce. These species include Gossypium arboreum and herbaceum (Asian cotton), G. barbadense (Egyptian cotton), and G. Hirsutum (American upland cotton). The cotton varieties derived from these species serve as the raw material for an array of products, ranging from clothing and silk fabrics to threads, kitchen utensils, and silk strips.

Global cotton trade

The cotton trade is the cornerstone of India’s economic landscape. Cotton production mainly takes place in states like Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, and Maharashtra. India’s cotton, renowned for its quality, finds its way into the global market. It is a sought-after commodity, and the nation reaps substantial profits from its exports. Indian cotton, in significant quantities, graces foreign markets, contributing to a healthy economic balance. Countries such as China, Bangladesh, Vietnam, and Pakistan are regular importers of India’s cotton.Know About India's Cotton TradeBased on data from 2022-2023, Bangladesh has been the world’s largest cotton-importing country importing 1481 thousand metric tonnes of cotton. Vietnam and China stood second and third with 1404 thousand tonnes and 1350 thousand tonnes of cotton respectively. In terms of exports, the United States is the world’s largest cotton exporter which exported 2787 thousand metric tonnes of cotton. Brazil and Australia are in second and third place with 1449 thousand metric tonnes and 1350 thousand metric tonnes of cotton respectively.

However, the scenario for India’s cotton exports in 2022-23 has been a little worrying. India witnessed a significant decline in cotton exports, hitting a record low at 15.50 lakh bales. A key contributing factor to this decline has been the reduction in global cotton prices, which has presented challenges to India’s cotton export market.

Decline in global cotton prices 

The decline in global cotton prices can be attributed to several key factors:

Strong cotton yield in America – In 2023, the United States witnessed a robust cotton yield, leading to an increase in global cotton supply.

Reduced cotton demand in China – In 2023, there was a notable reduction in cotton demand within China, further contributing to the drop in global cotton prices.

Impact of the Russia-Ukraine war – The geopolitical turmoil resulting from the Russia-Ukraine conflict has triggered a recession in the global economy. This has led to a decrease in the overall demand for cotton.
Know About India's Cotton Trade

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Through this blog, you will receive vital insights about the cotton trade in India and worldwide. We aim to provide you with the knowledge necessary to make informed decisions for your cotton business. For more valuable content like this, explore our Bijak blog page, and stay connected with us through our various social media channels.