International flash: Indian cotton prices to fall in the future

With domestic cotton prices in India falling to Rs 61,000/khand and a significant drop in the appreciation to ICE futures, Indian cotton export demand is beginning to recover. According to the Gujarat State Trade Association, the price of S-6 has fallen to 61,550 rupees / kande on January 25.

Karnataka cotton traders said that after the decline in domestic cotton prices, Indian cotton has a small amount of exports, Bangladesh has import demand. At the current price level, Bangladesh is the only buyer. In recent months, due to Indian cotton farmers hold cotton put up, Indian cotton prices have been significantly high, China has been no import demand. If Indian cotton prices continue to fall, cotton farmers may not sell as they did earlier in the year. Currently, most of the seed cotton across India is traded at 7,500-8,200 rupees per quintal, while the MSP price this year is only 6,080 rupees per quintal.

A trader in India said that the Indian cotton price to ICE premium has been reduced from nearly 15 cents to more than 10 cents, which will make the gradual recovery of export demand. Sources said that India has now exported 200,000 bales shipped, the later shipments will continue to increase. The Indian Cotton Association expects India's cotton exports to be 3 million bales this year, down from 4.3 million bales in the previous year, compared with the USDA's forecast of 4 million bales.

Currently, domestic demand for yarn in India is beginning to recover, and as prices stabilize, yarn mills are beginning to increase their raw material purchases and will begin to replenish their raw material stocks in the next 2-3 months. The Indian Textile Federation said that based on the current supply and demand situation, Indian cotton prices are expected to be broadly stable at the current level. As demand is still under pressure, the price fluctuations in the current year will not be too obvious. Considering the increase in Indian cotton production this year and the lack of demand, Indian cotton prices are expected to decline in the near future.