Monthly Prices Movement

  • Cotton prices traded with more of negative sentiments during the month of October in Indian markets mainly due to low buying activity.

  • The new crop arrivals which is continuing in the markets have curbed the major upside moves in prices during the month.

  • Buying activity was slow in the market during the month as the millers and spinners awaited large scale arrivals expecting fall in prices and improved quality.

Ground Report

  • Cotton production in India is estimated to increase close to 4% in the 2016-17 season (beginning from October 1) to 35.1 million bales, according to the Cotton Advisory Board (CAB). Cotton production in 2015-16 stood at 338 lakh bales.

  • CAB estimates India's overall shipment of Cotton in 2016-17 season at 5 million bales, down from 6.9 million bales in 2015-16.

  • CAB states that India's total area under Cotton reduced by 12% to 10.5 million hectares in 2016-17 from 11.88 million hectares in 2015-16. Area under Bt Cotton has fallen to 8.61 million hectares in 2016-17and area under non-Bt Cotton increased from 1.19 million hectares in 2015-16 to 1.89 million hectares in 2016-17.

  • Consumption of Cotton by mills is estimated to remain unchanged at 27.5 million bales and the closing Cotton stock is projected to be 4.8 million bales in 2016-17, up from 4.3 million bales in the previous year.

  • India Cotton output is projected at 26.5 million bales, up marginally from 2015/16 from a rebound in yield, which is expected to be offset from a 10% reduction in Cotton area, as per U.S. Department of Agriculture (USDA). India's Cotton stocks in 2016/17 are projected at 11 million bales.

  • India shipped around 6.9 million bales of Cotton during season October-September 2015-16, according to industry data.

  • A higher yield this season is expected to be procured by States of North India despite low sowing acreage and production is expected to increase by 24.3 percent at 43.9 lakh bales compared to previous year at 35.3 lakh bales, as per tour report released by Edelweiss.

  • India's top Cotton buyers were Pakistan, Bangladesh, Vietnam, China and Indonesia during October-July marketing season (2015-16), according to commerce ministry. The imports were at 2.715 million bales, 2.074 million bales, 0.664 million bales and 0.646 million bales respectively.

  • India's Cotton exports to China declined sharply by nearly 98.57 percent and reached 48 tonnes during September. Exports were down by 69 percent at 56183 tonnes from January to September.

  • India's Cotton exports to Vietnam in the month of September totalled 1,032 tonnes ($0.86 million). During the period from January to September, imports of Vietnam from India recorded at 90,973 tonnes, valuing $131.3 million, as per Customs data.

  • Cotton yarn exports from India declined 11.58% in value terms and 4.44% in terms of volume during April - June this year compared to the same period last year, latest data from the Southern India Mills’ Association showed.

  • Exports to China, the main buyer of Indian Cotton yarn, dropped to 99.09 million kg during the first three months of 2016-17 financial year from 149.66 million kg recorded in the same period last year.

  • India's Cotton imports from US increased over eight times to 4.79 lb (52,000 bales) during the first two months of the US Cotton marketing year (Aug-Jul), according to U.S Department of Agriculture (USDA).

  • India, the world’s largest producer of Cotton, started importing large amounts of raw Cotton in recent months after domestic prices ruled much higher than global rates.

  • The Cotton Advisory Board expects India to import 15 lb in the Cotton year ended last month but the industry estimates it to be higher, at about 18-20 lb.


  • Cotton Association of India (CAI) has urged the government not to go ahead with its plans to create a buffer stock of Cotton under the Cotton Corporation of India. CAI stated that the move, if implemented, would prove to be a regressive step for the Cotton sector.

  • China's state reserve may auction 2.5 million tons of Cotton next year to meet their growing supply deficit. In the auction which took place between May-September, the State Reserve sold around 2.6 million tons of Cotton.

  • China's government left 2017 low tariff import quotas for Cotton unchanged from 2016 at 894,000 tons, the National Development and Reform Commission said on its website. The low-tariff quotas are sanctioned under China's membership of the World Trade Organisation.


  • International Cotton Advisory Committee (ICAC) has projected a 7% increase in 2016-17 world Cotton production at 22.6 million tons and the average yield is projected to improve by 9% to 753 kg/ha.
  • Bangladesh is expected to remain the world’s largest importer of Cotton in 2016-17 as its volume increases by 10% to 1.2 million tons in order to satisfy growing demand, ICAC said.
  • In 2016/17, world Cotton consumption is forecast to remain unchanged from 2015/16 at 23.8 million tonnes, but is projected to exceed production by 1.3 million tonnes.
  • World Cotton stocks is projected to decline by 7.0% to 18.1 million tons which was 19.37 million in 2015/16 and 22.31 million tonnes in 2014/15.
  • Global Cotton production in 2016/17 is forecast at 102.7 million bales, nearly 7% higher than 2015/16, according to US Department of Agriculture (USDA) driven by increases in Australia and Mali, partially offset by declines in Brazil and the United States.
  • USDA estimates global Cotton stocks in 2016/17 is expected to drop to their lowest level since 2011/12, as China continues to reduce the surplus supplies, accumulated during the 2011-14 seasons.
  • Although China's consumption is forecast to decline for the seventh consecutive season by 2.0% to 7.2 million tonnes, it will continue to be the world's largest consumer of Cotton. China Cotton imports rose by 19 percent at 60,644 tonnes in the month of September whereas it declined by nearly 44 percent at 655,839 tonnes from January to September.
  • Cotton export of China was sharply down by 90.98 percent at 387 tonnes during the month of September and it was down by 73.67 percent at 5631 tonnes during January to September.
  • Pakistan's Cotton Crop Assessment Committee (CCAC) has officially been lowered its estimate for 2016-17 Cotton production to 11.039 million bales of 170kg each against earlier prediction of 11.272 million bales.
  • Pakistan's raw Cotton imports declined by 14.38% to 14,318 tonnes in September as compared to 16,723 tonnes in a month earlier, as per Pakistan Bureau of Statistics (PBS) showed. Imports during the period from July to September of 2016-17 marketing year totalled 45,280 tonne which is 62.84% higher than same period last year.
  • Cotton yarn exports from Pakistan recorded at 33,547 tonnes in September, declined 28.34% from 46,814 tonnes in August and down 17.04% as compared with 40,439 tonnes in the same month last year.
  • Exports of Cotton yarn by Pakistan from July to September of 2016-17 marketing year totalled 116,685 tonnes, down 6.33% as compared to 124,567 tonnes in the same time last year.
  • Vietnam imported 75,407 tonnes of Cotton worth $127.96 million in September, declined 26.9% month-on-month in volume terms and down 25.6% in value terms, according to data from Vietnam Customs. The country's Cotton imports stood at 103,139 tonnes ($172 million) in August.
  • Vietnam's Cotton imports from January to September totalled 787,364 tonnes a fall of 3% from a year earlier. The value of the imports during the period recorded at $1.234 billion, down 5.4% year-on-year.
  • China is expected to produce 4.9 million tonnes of Cotton in 2016/17 crop year that started this month, with consumption pegged at around 7.7 million tonnes.
  • Pakistan's Cotton production has dropped by 14% from a year earlier to 2.635 million bales this season from 3.076 million bales produced in the same period last year, according to the first phutti (seed Cotton) arrivals report of the current 2016-17 season, showing production figures of up to Sept 30.


  • Cotton prices in the near term will remain flat. However, we can expect correction in Cotton prices during the month when supply will be at the peak level.

  • The spinners and mills are expected to start their bulk buying during the month as soon as the activity regains after the Diwali holidays.

  • The crash in Cotton prices over a month, due to a better than expected crop and increased arrivals, is likely to make the exporters to look at signing of contracts for future shipments. The benchmark Shankar-6 variety has fallen 19 per cent in a month, to Rs 10,629 a quintal.

  • Exporters are waiting for a further fall in local prices before they initiate the signing of contracts with traders for assured supply, before dealing with foreign buyers.

  • Cotton arrival normally picks up only in November every year and the daily arrival could touch 200,000 bales by end-November. Due to late harvest expected in Gujarat and Maharashtra, arrivals will also continue during December and January in the markets which may weigh on the prices.

  • Traders anticipate at least Rs 700-1,000 a tonne of further fall in price by mid–November, when arrival of the new season crop hits mandis in full swing.

  • Cotton procurement by government may boost up the Cotton prices this year as market is already facing tighter supply situation owing to lower carryover stocks whereas production is expected to be lower than below five year average.

  • As per ICRA research, Cotton availability in India is likely to remain tight in calendar year 2017 and the prices to remain higher on a year-on-year basis during second half of FY2017.