Cheap imports and sluggish exports are looming large over India’s cotton market. Sluggish exports have dampened cotton sentiments in the market. India’s 2018-19 export is expected to be around 46 lakh bales compared with the 69 lakh bales it exported in the 2017-18 season. The downturn in export is mainly due to availability of cheaper cotton in the international market. On the other hand, imports have doubled.

Adequate steps will be taken to ensure cotton prices remain steady in the new season, set to start post-October. One of the measures to stop the dumping of cheap imports into the domestic market and keep prices steady would be by imposing a higher import duty on raw cotton.

Cotton sowing has been going on at a steady pace, with India reporting a five per cent year-on-year increase in sowing. As of August 2, India has reported 115.5 lakh hectares of cotton sowing, which last year was 109.79 lakh hectares. Domestic prices of kapas (seed cotton) have been well above the minimum support price throughout the 2018-19 season. However, July prices have dipped, which is attributed to sluggish exports for both yarn and lint cotton. This trend has been observed in most major cotton producing states in the country.