India’s cotton exports in February are set to jump to the highest level in two years, as a rally in global prices has made Indian cotton attractive for Asian buyers who earlier sourced the fibre from Brazil and the United States, traders said.

Before the benchmark US cotton futures hit a 17-month high this month, India, the world’s second biggest cotton producer, struggled to export the fibre. But, after the sharp rise in global prices, buyers have started to flock to India, five traders said.

In February, Indian traders signed contracts to export 400,000 bales (68,000 metric tonnes) of cotton - the highest since February 2022 - mainly to China, Bangladesh and Vietnam, they said.

“Indian cotton is now very competitive. It is the cheapest in the world, and exports are picking up,” Atul Ganatra, president of the Cotton Association of India told Reuters.

India could export 2 million bales in the 2023/24 marketing year to Sept. 30, surpassing the earlier expectation of 1.4 million bales, he said.

But a few traders feel exports could rise to 2.5 million bales, as Indian cotton is 6 to 7 cents per lb cheaper than the supplies from the United States, the world’s biggest exporter.

If Indian cotton continues to trade at a discount to the global benchmark, traders are expected to export 300,000 bales in March, said a New Delhi-based dealer with a global trade house.

Aggressive Chinese buying lifted US cotton prices in the past two months and now Beijing is making purchases from India, said a Mumbai-based trader.