As per estimates from the Cotton Advisory Board, India is likely to produce 36 million bales of cotton during the 2018-19 compared to 37 million bales in the previous year. Drought and uneven rainfall in Gujarat and Maharashtra is likely to pull down the average yield. So far, cotton prices have softened. After touching Rs 136 per kg (Sankar-6 variety), the price has eased to Rs 124 per kg. On the other hand, robust demand for yarn both in domestic and international markets has supported yarn prices. A 35 per cent jump expected in yarn exports between April and October from a year ago and a 25 per cent growth in overall textile exports will bolster yarn prices in the near term. Stable demand and production would kick in benefits of operating leverage too. This should help sustain operating margins