In the Indian cotton market, prices have strengthened across key hubs in Gujarat and North India. Following a recent decline, spinning mills have resumed purchasing and are actively replenishing their stocks. However, the scope for any significant price surge remains limited due to weak demand for cotton yarn and the anticipated increase in the arrival of the new crop.
Cotton Prices Strengthen in Gujarat and North India
Spot cotton prices have improved across various markets in Gujarat, including Ahmedabad. Prices have also strengthened in Punjab, Haryana, and Rajasthan, driven by increased procurement by mills. Mills are building up their raw cotton inventories to meet requirements ahead of the upcoming peak consumption season.
Recent buying activity has eased the pressure for distress sales in the market. Nevertheless, demand for cotton yarn remains sluggish in both domestic and international markets. Yarn prices for November are hovering near the levels seen at the end of October, making it difficult for mills to pass on the rising costs of raw cotton to their customers.
Supply and Demand Dynamics
Procurement by mills has been the primary factor providing short-term support to cotton prices. Taking advantage of lower price levels in recent weeks, spinning mills and textile manufacturers have increased their stock holdings. This has tightened availability in the spot market, leading to an improvement in prices at the ginning and trading levels.
India’s cotton production for the 2026-27 season is expected to decline due to adverse weather conditions and lower yields in major producing regions. According to preliminary estimates from the Cotton Association of India (CAI) and other trade bodies, production could hover around 28–29 million bales (of 170 kg each). Some projections indicate a decline of more than 10% compared to the previous season. Market Outlook
The central government has extended the customs duty exemption on raw cotton imports until the end of December 2026. This provides mills with an import option should domestic prices rise. Meanwhile, procurement by the Cotton Corporation of India (CCI) and the Minimum Support Price (MSP) mechanism may offer additional support to the market.
The arrival of the new crop and weather conditions will determine the market's direction. As harvesting and ginning activities gain momentum, arrivals in the mandis (agricultural markets) are likely to increase, which could temper the current upward trend. Overall, cotton prices are expected to remain stable with only modest gains, rather than experiencing a significant surge, in the near term.
