India’s cotton production in the current fiscal year is likely to rise by 20 per cent. The surge in production due to a bigger cultivated area and a boost to yields from above-average monsoon rains is likely to bring down prices. But India still has to import cotton. This is because certain grades such as contaminated free certified cotton and extra long staple cotton are not produced in India.

For the moment though high cotton prices in India have kept the industry burdened with low earnings. Since Indian supplies are uncompetitive due to higher prices, buyers are giving preference to Brazil and the US. The expectation is that bumper cotton production in the new season could damp prices and make exports viable. The minimum raw cotton buying price has been raised by 38 per cent in two years even as global prices were corrected to their lowest level in more than three years. Bulk buying by private bodies apparently shows the good quality of Indian cotton. Depending on the season, India produces 320 to 380 lakh bales of cotton, and despite the increasing minimum support price farmers sell only three per cent to the Cotton Corporation of India as they get a much better price for their produce by private bodies.