Cotton inventory in India, estimated at around 70 lakh bales at the close of the 2014-15 season and is expected to be the highest ever cotton stock carried by the country after 2008-09. The huge volume of carry forward cotton stock would place the country in a comfortable position.

However, the predominantly cotton-based textile industry in the country is subject to a crisis due to volatility in the price of the white fiber. The Cotton Corporation of India could sell only 12 lakh bales against 25 lakh bales offered during the last couple of months as the corporation’s rates were high. By not offloading the fiber procured from Telangana and Andhra Pradesh till end-April, the corporation gave mills a tough time, resulting in flaring up of prices.

There was some respite during the current season as prices had remained comparatively stable due to reduced imports by China and over supply in the global market. The global area under cotton is expected to drop by seven per cent in 2015-16 and production by nine per cent. Yet, the supply position in 2015-16 is expected to be comfortable as China would continue to reduce imports and downsize its reserves.