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India's cotton crop looks promising this year

India is expected to have a good cotton crop in the new season beginning in October 2014. Hopes are that the production will be at least 37 million bales. With similar prospects for US this year, the world’s cotton crop will probably be a bounty.

Price volatility is a major concern for spinners in India. Several associations are pleading with the Cotton Corporation of India to ensure supply throughout the year at a stable rate. Earlier, cotton prices were season-dependent and rate changes were expected only four times in a season. Now, with the advent of technology, price fluctuations happen on a daily basis.

Cotton prices have retreated to the lowest level in nearly five years as investors worry that global production could overwhelm demand for the fiber. The US, the world’s biggest cotton exporter, is expected to produce a large crop in the season that begins August 1. But global demand is likely to fall short, especially with top importer and consumer China wrapping up a two and a half year stockpiling program.

Although the monsoon has arrived in India, the volume of precipitation has varied widely and yield is likely to suffer in some places. The disappointing monsoon appears to have cost India the chance of overtaking China as the world’s top cotton grower.