Cotton stocks are building up in India due to sluggish exports and fresh crop arrivals in Punjab, Haryana and Rajasthan. A cotton output of 7.5 million bales is expected in Punjab, Haryana and Rajasthan, compared with 6.5 million bales last year. Cotton spot rates are hovering around the minimum support price for the commodity, down eight per cent to ten per cent from a year ago. The domestic cotton market is also suppressed due to headwinds in exports of cotton yarn, but demand for cotton seeds and better quality of fiber this season are managing to keep prices from slipping further.

Indian prices have to come down to buttress sagging exports of cotton yarn. Either domestic cotton prices needs to be at par with international prices to arrest the fall in exports or the currency valuation of the rupee and the dollar needs to be favorable for the trade. A good crop is anticipated in the current year as the condition of the standing crop is good. If the favorable weather keeps up, a record output and a high quality of cotton is expected this year. The condition of cotton plantations across the country is good and a record harvest is on the cards.