India’s cotton prices stabilize as demand remains weak

Cotton prices have stabilized after hitting a seasonal low, primarily due to increased buying activity from spinning mills at lower price points. The Cotton Corporation of India's (CCI) procurement of raw cotton at the minimum support price (MSP) has also provided some support to the market.

Despite a projected decline in cotton production this season, weak demand from mills and falling cottonseed prices have kept cotton prices under pressure. Farmers in key cotton-producing regions like Gujarat are holding back their produce, hoping for better prices.

Millers in South India are facing challenges due to slack yarn demand and tight liquidity. Additionally, the recent decline in ICE cotton futures has discouraged multinational buyers from entering the market. The Cotton Association of India (CAI) estimates a 7 per cent drop in cotton production to 302 lakh bales for the 2024-25 season, while consumption is projected to remain flat at 313 lakh bales.