February 28, 2012

Indian cotton exports slow on EU finance crisis

India's cotton exports are slowing as the European debt crisis lowers demand for garments from manufacturers including China and Taiwan, according to Bhadresh Trading Corp.

India is the world's second-largest cotton producer.

"Demand has dried up from all countries and this has been pressuring cotton prices," Parth Mehta, joint managing director at Mumbai-based Bhadresh, said in a phone interview. "The mills, wherever they may be located - India, Taiwan or China - are not getting orders for the end products as much as they would want."

Futures slumped 50% in the past year in New York after farmers boosted output to the highest ever and slowing economic growth reduced demand for apparel. Gap, the largest US apparel chain, forecast profit this year that missed some analysts' estimates on declining sales at its Old Navy stores.