Monthly Prices Movement

  • Cotton prices surged very strongly during the month of July at the various markets across the country on strong demand from retailers and millers, weak Monsoon progress in Indian state of Gujarat and tight supply-demand balance sheet due to lower crop scenario.
  • Cotton prices in the domestic market so far surged around 46 percent since April on strong domestic demand and revision in production.

Ground Report

  • India Cotton Sowing so far is down by 12.72% and the overall acreage is likely to touch 10.2-10.4 million hectares as against 11.9 million hectares in the previous season and 12.8 million hectares in the season before. A 10% shortfall is likely in the overall Cotton acreage which could result in a 10% deficit in the total output. Actual figure will be known by mid of month. However, good rainfall is likely to offset acreage losses, but the weather should be favorable during growth and harvesting period.

  • India's Cotton imports may double this year following 30% increase in domestic prices over the past three months. The imported Cotton is expected to reach Indian ports from July end onwards.

  • North India based mills had sourced sufficient quantity and many small mills have only one month stock, but now they are likely to reduce Cotton consumption. Andhra Pradesh Spinning Mills Association decided a production holiday for one day per week on every Wednesday (that day all 3 full shifts) keeping in view of the present Cotton rate.

  • The Southern India Mills’ Association (SIMA), stated that the Cotton position in the domestic and international market is very comfortable and advised mills to avoid panic purchase.

  • Textile mills likely holding stocks of around 1-1.5 months, while stocks with private traders, CCI and MNC's estimated to be around 2 million bales, which is around 2 to 2.5 half month of domestic consumption. The rest of demand is likely to be met through imported Cotton.

  • The prospects for next season Cotton crop is not very encouraging as sowing is down in North India, while lags in Central and South India. The consumption of Cotton during August-September likely to drop 15-30% due to huge disparity to mills. The supply-demand balance sheet likely to normalize after decrease in consumption by mills and expected imports next month.

  • Cotton Advisory Board (CAB) stated that India’s Cotton output likely to decline 12.4 per cent to hit the lowest in five years for the current crop year (October 2015–September 2016). The opening balance of Cotton is expected to be 4.3 million bales as on September 30, 2016.

  • There was no doubt about strong fundamental in Cotton, but the rise was quick and more than expected. Overall mills in the country have opted to wait and watch the situation in Cotton and market participants are eyeing correction of around 4-5 percent in the coming sessions.

  • CCI stated that after a steady rise over the years, Cotton cultivation in India has declined by 8% this year. The national Cotton acreage has come down from 12.8 million hectares to 11.8 million hectares between 2014-15 to 2015-16. A large number of Cotton growing farmers supposed to have switched to food crops such as Soybean for better returns this time.

  • India likely to import record Cotton this season as domestic supplies have dwindled due to two consecutive droughts in the country. Nearly 0.75 million bales of Cotton was imported between October 1, 2015 and June 30, 2016 and the volume of import is expected to remain same in next three months of July, August and September.

  • India likely to import more than 1.5 million bales (each of 170 kg) of Cotton as against the previous import high of 1.46 million bales in 2012-13.

  • With domestic Cotton prices higher than international rates, export prospects for the spinning industry also pose a challenge. India's Cotton exports in June estimated down by 26%.


  • India's Department of Agriculture has assigned a central team to monitor white-fly infestation and management on cotton.

  • Pakistan's Ministry of Commerce has renewed the annual limit for import of Cotton bales through land route, Wagah border, and allowed the Customs to clear 14,686 stuck up bales imported from India.

  • India has decided to sell its existing stock of Cotton purchased under Minimum Support Price to the spinning mills. The Cotton would be given to the MSME spinning textile units registered with the Office of Textile Commissioner.

  • Cotton farmers in Punjab will not suffer as much as last year from the white-fly infestation as the attack on the crop this year is in a limited area and unlikely to spread. Cotton sowing in Indian state of Punjab so far reported lower by 24%.


  • USDA forecast India's Cotton output for 2016-17 to fall by 2% to 27.50 million bales on delayed arrival of monsoon in the country. USDA trimmed India's domestic consumption to 24 million bales from 24.25 million while export forecast rose to 4.2 million bales from 4 million bales as compared to previous estimates.

  • Quarterly outlook report by World Bank stated that India's Cotton production is expected to increase to 6.45 million tonnes this season, from 5.88 mt in 2015-16.

  • Cotton imports by Pakistan are expected to remain high along with back to back droughts in India and this could boost global Cotton prices from current levels.

  • USDA forecast Pakistan’s 2016-17 Cotton production at 8 million bales, down one million bales from the previous estimate.

  • Pakistan likely to turn towards US for Cotton during the current fiscal year 2016-17 as prices in India has turned uncompetitive after recent sharp rally.

  • Pakistan raw Cotton imports during June month dropped 36.69% compared with a month ago, while rose over 22.88% same period a year ago. The drop in Pakistan import mainly attributed to commence of domestic new crop supplies followed by higher prices in the neighboring India.

  • Pakistan's Cotton crop prospects for the current season 2016-17 not very bright as sowing target has been missed by a big margin of 21%.

  • The Chinese government’s auction of state Cotton reserves has continued to record strong sales amid strong demand from domestic mills amid tight supply and lesser imports.

  • Cotton area in China is estimated to decline by 10% to 3.1 million hectares in 2016-17 and production is forecast to decrease by 10% to 4.7 million tons, ICAC said.

  • ICAC has lowered its forecast for global Cotton stocks by the end of 2016-17 by 200,000 tonnes, to 20.4 million tonnes.

  • USDA forecast global Cotton consumption to grow modestly during the 2016-17 marketing year (August-July), reaching 110.8 million bales. Global Cotton production forecast for 2016-17 falls to 102.55 million bales from 103.17 million bales.

  • Vietnam, the world's fifth largest garment exporter, likely to increase its Cotton imports by about 19% from a year earlier to 1.2 million tonnes in 2016 to meet rising demand from its textile industry while domestic output is insignificant.

  • Vietnam Cotton imports declined by 14.1% in June. Vietnam imported 75913 tonnes of Cotton worth $116.82 million in June, declined 14.1% in volume terms and down 11.9% in value terms month-on-month, according to latest data from Vietnam Customs.


  • Indian Cotton is still 5-6 cents premium over ‘Cotlook Index’ and for better prospects it should turn into discount to attract overseas demand. Cotton prices in the domestic market are higher than international market by 5-7%, hence prices are expected to decline in the level of global market. Much fall is not possible amid tight balance sheet of Cotton.

  • It is still too early to predict anything as supply-demand balance sheet is tight and any disturbance in weather or pest attack to new crop may push Cotton prices higher.

  • Farmers earlier were not in mood to go for Cotton due to lower prices but better prices since April till now can attract farmers and they may tend to increase Cotton acreage. Cotton is still facing stiff competition with Pulses in many states as it seems to be very lucrative with good remuneration by government.

  • Higher prices have dent parity of many mills as finished product prices didn't rose proportionately. To sustain the current rise, demand and price of Yarn should rise, otherwise consumption of Cotton will decline going forward due to disparity.

  • The Cotton demand supply is very tight and it is likely to prolong till beginning of November due to late sowing owing to delayed rain this year. There are still more steam left in Cotton and prices would remain firm until September-October, however with supply of new crop prices will recede.

  • Rising domestic Cotton prices, which have surpassed international Cotton prices, likely to adversely impact the yarn demand and profitability of spinning mills in the second quarter of 2016-17.

  • Due to the expectation of less output this year, there has been a rise in Cotton prices which is set to make Indian apparel costlier and would hit India's competitiveness in the world market. Supply is thin this year, but one should also look after the consumption as higher prices prompted many mills either to reduce Cotton consumption or increase blending of synthetic yarn.

  • There is still uncertainty about Cotton outlook for the next three month, but sharp fall from hereon unlikely as medium-best quality Cotton from new crop is likely to available only by October-end.

  • Industry players are now uncertain about future Cotton trend, whether to buy, sell or hold as the new crop is expected from September-end, though the sowing is still lagging in many states and area contraction most likely, but better yield amid favorable weather likely to offset acreage losses.

  • India Ratings and Research stated that Cotton prices, which have shot up by over 35% since May 2016, unlikely to come down sharply till the arrival of new crop from October despite state-run CCI's efforts to offload its stock in the market to contain prices.

  • The fall in domestic production has spiked Cotton prices, which are likely to remain at a high level of Rs 120-127/kg till the Cotton season ending September. The rise in prices is expected to squeeze profits of ginners and spinners by over 15% in the current fiscal.