Middle East War Boosts India Cotton Exports

The ongoing war in the Middle East has caused significant supply chain and fuel disruptions, leading to a notable shift in global cotton yarn trade. China, a major importer of cotton and yarn, has seen its supplies from other countries like the United States and Brazil decline. Consequently, India, the world's second-largest cotton producer, has emerged as a preferred and nearby sourcing point for China. This shift is further bolstered by the India — Indian rupee's approximately 7% weakening against the China — Renminbi, making Indian cotton yarn imports cheaper for Chinese buyers. Indian cotton yarn makers, such as Fiotex Cotspin, are experiencing unprecedented demand, with export order books growing by 40% and factories operating at 100% capacity. The state of India — Gujarat, due to its proximity to cotton-growing areas and ports, is particularly benefiting from this surge in exports, with around 1,500 containers of cotton yarn sailing to China each month since November, a five-fold increase from earlier averages. In contrast, mills in India — Tamil Nadu face higher transport costs, making exports less favorable for them.