India’s mill use of cotton declined in 2016-17 due to high domestic and international cotton prices. However, despite a below normal monsoon forecast this year, the Indian textile industry's cotton use is now projected to recover by one per cent in 2017/18. In addition, cotton imports from key markets like China and Vietnam are also set to grow by four to six per cent, thereby increasing India’s position in the domestic and global cotton markets.
India’s cotton exports are projected to decline by 23 per cent in 2016-17 partially due to the delay in harvesting earlier this season. Similarly, cotton prices have begun showing a downward trend, which could enhance mill uptake going forward. However, expectations of higher cotton demand from China and a forecast of El Nino may still keep cotton prices higher.
In 2016-17, farmers continue to realise better prices for their produce since cotton prices have remained firm. Cotton arrivals are in full swing now and the gap of arrivals as compared to last year has narrowed down considerably.
The Cotton Corporation of India has been purchasing cotton at commercial rates during the current season and might have procured more than 1,00,000 bales, which will be available for textile mills later in the season.