India Cotton Prices Expected to Moderate in the New Season
June 28, 2022 Cotton price will soften in the new India season beginning October 1, 2022.
During a June 25 event organized by Textile Association India, South India Unit, about 700 technical experts in the textile industry from all parts of India gathered to analyze the cotton situation.
I was privileged to address the standing-room-only audience of technical people for on the cotton situation, providing detailed analysis. That analysis centered on the five key drivers of the sector:
- Demand and supply
- Climate
- Economy and inflation
- Geopolitical scenario
- Market influences.
Through interaction with international stakeholders in the cotton sector in the United States and India and based on factors like planted acres, economic situation, and inflation, my prediction is that there will be a tight supply situation, but that the price will moderate in the new season.
India cotton is expected to range between Rupees 60,000 to mid-50,000 range per candy (356 Kgs). As the season progresses, based on satisfactory climate with no delayed rains in Gujarat and the weather situation in Texas, the price may further soften to the lower Rupees 50,000 level. Since the cotton pipeline is basically empty now, price may begin at a slightly elevated level in the new season. As the arrival picks up with a steady pipeline, the price will soften and hence the above range is expected.
This situation may be comfortable to farmers, the textile sector, and consumers.
We must recognize that the consumer will be the key player. Interest rates and income levels – all influenced by inflation – will drive the demand for nonessential commodities.
Cotton is here to stay, and its inherent “comfort” is a much-preferred attribute.
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