The prices are declining because of a plunge in exports to its biggest market, China, which had changed its policy on cotton imports.
"Situation is very grim. India needs to find ways to increase its cotton exports by exploring new markets. Government is seized of the matter and is taking steps to stabilise the situation," an official said.

An industry expert said that India also needs to set up spinning and yarn units domestically and in countries like Vietnam to boost exports of raw cotton and other value-added products.
Recently a team led by Commerce Secretary Rajeev Kher visited two cities of Vietnam. The south ease Asian nation is one of the biggest importer of India's cotton and also an important centre on spinning and yarn making. China has huge investments in this sector in Vietnam.
In December, the government had eased cotton and cotton yarn export rules to boost overseas sales as slowing demand from China has hit India’s trade in the commodity.
According to the USDA report, India -- the world's second -biggest producer of cotton -- is likely to export 7.69 million bales of the fibre in 2014-15 marketing year (August- July), down by 35 percent from last year due to sluggish demand from China.

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