Indian cotton prices have strengthened over the past few days, with Cotton Corporation of India (CCI) prices cumulatively rising by about ₹1,100 per candy (356 kg), according to stakeholders. The gain is driven by a firming trend in international futures and a delay in the monsoon's progress into central India, which has boosted market sentiment.
Price Surge Driven by Global Futures and Monsoon Delay
Atul Ganatra, chairman of the Crop Committee at the Cotton Association of India (CAI), attributed the price increase mainly to international futures. “The ICE Dec Futures has gone up from 75 cents per pound to 80 cents per pound,” he said. As of the latest data, the ICE July futures are hovering around 76.05 US cents per pound, while ICE December futures are around 79.67 cents per pound.
“Delay in monsoon arrival is the main reason for prices firming up,” said Arun Khetan, a broker in Akola. In Vidarbha, a key cotton-growing region, sowing has yet to start, although a few farmers with drip irrigation have begun planting.
Supply Side: Reduced Sowing and Tightening Stocks
According to the latest data from the Agriculture Ministry, cotton sowing as of June 19 is down about 25% year-on-year, at 17.13 lakh hectares (lh) compared to 22.82 lh a year ago, due to weak monsoon progress. Khetan noted that cotton sowing in Vidarbha can be taken up until July 15, and the overall expectation is a 10% increase in area this year.
Anand Popat of CotYarn Tradelink LLP estimated total cotton stocks at 182.50 lakh bales of 170 kg each, comprising:
- Spinners: 94 lakh bales
- CCI unsold stock: 25.50 lakh bales
- MCX, ginners and traders: 63 lakh bales
“Tightening availability of quality cotton and sustained mill demand continue to support domestic prices,” Popat said in his weekly note.
Demand Remains Firm as Mills Buy CCI Cotton
Ramanuj Das Boob, a sourcing agent in Raichur, said that over the past few days, CCI has seen good demand, with about 7 lakh bales sold last week. Multinational companies are selling at a higher price of around ₹1,000 per candy over the CCI price, while resellers quote ₹300–500 higher. CCI prices are hovering between ₹62,500–63,200 per candy.
Das Boob also noted that while cotton prices have moved up, there is no corresponding increase in yarn prices. “ICE Futures and the uncertainty over monsoon progress and its impact on sowing has led to the firming trend,” he said.
Price Outlook and Key Factors to Watch
Market participants are closely monitoring the monsoon's progress in central India. The sowing window for Vidarbha extends until July 15, and any further delay could tighten supplies further. Meanwhile, the reduction in unsold CCI stocks to 25.50 lakh bales and declining daily arrivals as the marketing season nears its end suggest that quality cotton availability will remain constrained. Sustained demand from spinning mills, reflected in strong CCI sales, is expected to keep domestic prices supported in the near term. Key data releases to watch include weekly CCI stock updates and monsoon coverage reports.
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