India’s cotton production for the 2016-17 seasons is expected to be about 350 lakh bales. Exports may be 60 lakh bales. But a lot depends on the monsoon. Though a good monsoon has been predicted, there has been damage to the crop in the previous season due to whitefly attacks and the pink bollworm and this could impact crop size.

The acreage was around 118 lakh hectares in the season of 2015-16 and there could be a minor correction this season. Domestic prices have risen on tighter supplies and higher prices for the staple in international markets. Price of lint (processed cotton) has touched Rs 42,000 per khandi as against Rs 33,000. Raw cotton is Rs 6,500 a quintal. Low output as compared with the previous year has pushed up prices, as a result of which those who had the funds purchased raw cotton from the markets and sat on the processed lint waiting for the price to rise. Finally, as a shortage was created, the rates began increasing to Rs 42,000 a khandi of lint.

The main buyers for Indian cotton include Bangladesh and Pakistan. The landed cost of Indian cotton for buyers in Pakistan and Bangladesh is at 75 cents per pound compared with around 73 cents for Brazilian cotton.