The surplus yield of cotton in states like Maharashtra, Madhya Pradesh, Andhra Pradesh and Gujarat has already led to a huge pile up in many godowns across the country. The price of freshly harvested cotton in Tamil Nadu hovered around Rs 3,500 to Rs 4,000 because of the arrival of poor quality fibers moistened by the rain.

India is one of the largest cotton producing countries in the world. In fact there is a fast accumulating buffer stock of cotton globally. Other cotton producing countries like China and the United States are seeing a growing buffer stock of cotton produced in their own countries. The global accumulation of cotton stock is 21.82 million tons during 2014-15.

Last year, India’s cotton export had fallen to 0.89 million tons compared to 2.02 million tons the country exported in 2013-14. This was because of sluggish markets and a fall in buyers. Last year the country produced 6.4 million tons from 12.4 million hectares.

Recently harvested cotton is currently being sold below the minimum support price fixed for the commodity by the cabinet committee on economic affairs. The committee had fixed prices of Rs 3,800 for medium staple cotton and Rs 4,100 for long staple cotton. In many parts of Maharashtra and Odisha, however, traders are buying medium staple cotton for Rs 3,500 and lesser and long staple cotton for Rs 3,800 to Rs 4,000.