Experts believe cotton stockpiles in India are poised to jump to a record as exports plunge and revival in monsoon rains boosts crop prospects. Inventories will surge 25 per cent by October from a year earlier. The surplus may further widen with next year’s harvest. China is importing less cotton because of swollen inventories. China’s imports in the first half of the year slumped 33 per cent. That has India, US and Australia battling for market share in countries such as Bangladesh and Vietnam.

Prices in New York slumped to a five-year low in January amid global oversupply. Futures on the Multi Commodity Exchange of India in Mumbai have declined about 34 per cent from a record in 2013. Disposing off the surplus is going to be a challenge for India. The silver lining for India is rising demand from domestic textile mills. Consumption may increase five per cent in 2015-16.

The area under cotton may drop five to seven per cent this year as most farmers didn’t get good prices in 2014-15. The plunge in prices forced the Cotton Corporation of India to buy 8.7 million bales at guaranteed prices. A revival in monsoon rains over the main growing regions may help the crop already planted.