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Cotton situation eases in India

The cotton market in India seems to be stable. Domestic demand and prices are firm. Cotton prices vs yarn prices have settled. Volatility is more or less absent. Spinners, ginners and farmers are realising reasonable prices since February. Spinning mills suffered over the last two years and many closed doors due to cotton price volatility and weak yarn prices. This trend seems to have reversed.

In India, 65 per cent of the season’s cotton crop has arrived and if the price stability is maintained it will be a win-win for the cotton and textile sectors. However, if cotton prices skyrocket, spinners would face difficulties. The view from the spinning mills is that yarn prices are stable and there is demand for yarns and made-up goods such as bedspreads in export markets. This increases cotton demand and helps push up the price of cotton.

Indications are that cotton price this March is going to be steep when the peak arrival season ends in India. Overall, the agriculture market is expected to be bullish in the coming months. Pakistan, Bangladesh, China and Vietnam are key buyers of Indian cotton. Textile mills in southern India have contracted cotton for shipments in March and April.