Cotton prices in Gujarat have fallen. Among the reasons for the fall are: lackluster demand and exporters’ losing competitiveness due to appreciating rupee. A strong dollar allows Indian exporters to offer cotton at competitive prices in the international market as their realisations in rupee terms remain high even after some discounts. Overall, demand for the natural fiber has weakened as there are fewer buyers. Even the yarn market is bad and demand in the international market is also not encouraging.

Amid low demand, arrival of cotton in local markets, has slowed. Around 40,000 bales are arriving daily, as against 70,000 to 75,000 bales during the same time last year. Gujarat is expecting a 16 per cent decline in cotton output in 2018-19 despite an increase in the area under cotton cultivation.

There has been crop damage in major producing states such as Maharashtra and Gujarat. Almost half the country's cotton comes from these two states. Deficient and erratic Southwest monsoon this season followed by a long dry spell this winter season has impacted the standing crop. While the first cycle of cotton picking is over, the second and third cycles are likely to get impacted badly due to spoilt flower buds.