Indian Cotton Farmers Expected Prices to Rise Without Selling Cotton

From October 1st to December 5th, India’s total cotton arrivals reached 7 million bales (each bag weighing 170 kg), marking a slight increase compared to the 7.2 million bales recorded during the same period last year. However, the distribution across states shows mixed performance. In Gujarat, the country's primary cotton market, arrivals fell by 15% year-on-year to 2.3 million bales. Similarly, Maharashtra saw weak arrivals, while Madhya Pradesh and Andhra Pradesh reported only marginal increases. This overall slowdown in cotton arrivals has raised concerns among traders and buyers. Despite the lower arrival figures, this year’s cotton production is expected to reach 32.5 million bales, up from 29.5 million bales in the previous season. Farmers have benefited from improved yields, but the market remains cautious due to the delayed harvest and reduced supply. Most farmers have managed to cover their cash costs, as cotton prices have nearly doubled this season. This has led to a more deliberate selling approach, with many holding back to capitalize on higher prices. According to a local dealer, the price surge began when exporters started accepting contracts and rushed to fulfill orders before the December 15 deadline. To manage the rising domestic demand and stabilize prices, the Indian government has set an export quota of 5.5 million bales for the current season, with December 15 as the final deadline for exports. Industry experts estimate that traders may only be able to fulfill between 300,000 to 3.5 million contracted bales due to the sharp rise in domestic prices. With cotton becoming significantly more expensive than last year, purchasing has become a challenge for both domestic and international buyers. One official from the Indian Cotton Company noted that the price of Sankar cotton, one of the six major varieties, hit a record high of Rs 45,500 per candi (1 candi = 356 kg). This is a significant jump from last year’s low of Rs 32,200 per candi. The strong price trend is expected to continue as the season progresses, with further pressure on the market if supply does not catch up. With the export window closing soon, the coming weeks will be critical for both farmers and traders as they navigate the evolving cotton market dynamics.