Indian cotton prices are ruling 10 per cent lower than international prices. Even in 2017-18, Indian cotton prices were lower than international prices. The minimum support price (MSP) is up 26 to 28 per cent, notwithstanding favorable monsoon conditions. The area under cotton declined marginally. And Gujarat and Maharashtra together account for more than half of the country’s total cotton production.
Cotton quality is expected to be much better during 2018-19 compared to earlier season because of the efforts made by the Cotton Corporation of India in (CCI) enforcing quality parameters and ginning practices. Textile mills have been advised against panicking over reports of a tight cotton stock position during the current season. The Indian Cotton Federation has appealed to traders to desist from speculating on the production of cotton and increasing the price of the white fiber.
During the last cotton season, the trade had projected a very tight closing stock, but in reality the stock was comfortable, which in turn helped in a downward correction of the price by Rs 2,000 to Rs 46,500 during the end of the season. Demand for Indian cotton happens to be robust this year from China as a trade war is prompting the world's top consumer to avoid imports from the United States.