Global Perspective: India Cotton Price Is Expected To Decline In The Near Future

As India's domestic cotton price fell to 61000 rupees/kand and the premium on ICE futures dropped significantly, India's cotton export demand began to recover. According to the data of Gujarat Trade Association, the price of S-6 fell to 61550 rupees/kand on January 25.

Cotton traders in Karnataka said that after the fall in domestic cotton prices, Indian cotton has been exported in a small amount, while Bangladesh has import demand. At the current price level, Bangladesh is the only buyer. In recent months, Indian cotton prices have been significantly higher because Indian cotton farmers have been selling up cotton, and China has no import demand. If Indian cotton prices continue to fall, cotton farmers may not sell as they did earlier this year. At present, the transaction price of most seed cotton in India is 7500-8200 rupees per kilowatt, while the MSP price this year is only 6080 rupees per kilowatt.

An Indian trader said that the premium of Indian cotton price on ICE has dropped from nearly 15 cents to more than 10 cents, which will gradually revive export demand. It is reported that India has exported 200000 packages for shipment at present, and the shipment volume will continue to increase in the future. The Indian Cotton Association estimated that India's cotton export volume in this year was 3 million bales, lower than 4.3 million bales in the previous year, and the US Department of Agriculture predicted 4 million bales.

At present, India's domestic yarn demand is beginning to recover. With the price stabilizing, the yarn mill has begun to increase the purchase of raw materials, and will start to replenish the raw material inventory in the next 2-3 months. The Indian Textile Union said that according to the current supply and demand situation, Indian cotton prices are expected to stabilize at the current level. As demand is still under pressure, the price fluctuation in this year will not be obvious. In view of the increase in Indian cotton production this year and the insufficient demand, it is expected that Indian cotton prices will fall in the near future.