With China cutting imports orders due to withdrawal of some export incentives, Indian cotton yarn exporters are witnessing piling up of inventories and drop in demand. Weak demand in the domestic market is further adding to their woes causing higher inventory levels. Despite the current situation, industry expects exports to reach an all time high of 1,200 million kg in 2013-14 because of the positive demand for cotton yarn from China and South American countries witnessed at the beginning of this financial year.

The Cotton Advisory Board has said so far, 1,000 million kg of yarn had been exported. However, the industry expects during the remainder of 2013-14, exports would be restricted to 200-300 million kg. Exports to Latin American countries account for about 10 per cent of India's overall cotton yarn exports. However, after the government's withdrawal of the focus market scheme (which focused on Latin America and Africa), this demand is expected to fall in the coming months. 

Cotcorp.gov.in