In The News: India Halts Cotton Exports, World Reacts

In April, the Government of India made major news by suspending the registration of cotton exports and shipments from the country in an effort to boost domestic supplies and moderate surging prices. In 2009, India ranked as the world’s second largest cotton producer and exporter. Understandably, this move has caused ripple effects across the globe.

In China, where economic growth is driving demand for cotton up but domestic production of cotton is down from one year ago, the announcement from India is causing concern. The State-owned Assets Supervision and Administration Commission stated that China faces “an imminent cotton shortage after India halted exports” and that China’s cotton deficit will be “about 310,000 metric tons before the new crop comes onto the market.”

Early indications are that growers in the United States, Australia, Brazil and West Africa will benefit the most from India’s decision, with increased orders for their supplies coming in from around the world.