Indian cotton prices are trading easy with the prospects of bumper crop, increasing daily arrivals and a financial crunch in the market. Spinning mills have not been able to build cotton inventories yet as the yarn market remains sluggish. Rains in September and October can affect the arrival pace and somewhere some quality concern can be seen, but this will depend on intensity and frequency of rains. Of the daily cotton arrivals, most of the cotton is coming from north India.

This year, Cotton Corporation of India’s sourcing strategies will be very crucial to give direction to the market. The CCI will have to get active and buy a good amount of Indian cotton, failing which Indian cotton will trade lower than the minimum support price. This will create fewer export possibilities and can also give immediate support to Indian spinning mills. Lower cotton prices will make Indian yarn competitive. The ban on trade with Pakistan has taken out around a million cotton bales from expected export numbers for the crop year 2019-20. That will directly be a surplus in India.

Meanwhile, India needs to come up with some export promotion policies for the textile industry and brighten the dull scenario.