Indian Cotton Prices Predicted to Fall

Cotton prices in India are predicted to fall again this week despite strong demands from neighbouring countries such as Bangladesh and Indonesia.

Demand for Indian cotton from Bangladesh and Indonesia is likely to continue rising as these countries are increasing production to meet higher import orders from China. Textile mills are beginning to blend cheaper imported yarn with cotton stocks bought at higher prices to make more end-products.

Unfortunately, low demand for raw cotton in China -- the world’s largest buyer of Indian cotton -- could limit the current prices.

A large number of cotton farmers in India are reserving their product in the hope the prices rise. The market is not showing any sign of rising due to poor internal and external demand this year, and the current rate of .73 cents/lb means it’s unlikely that farmers will be seeing any gains in the near future.

The prices in local markets steadied because of the Cotton Corporation of India, which purchased more than 1.3 million bales 374.7 lbs. each from farmers. Some predict the government will buy an additional 7 million bales, which could outweigh rising supplies.

Global cotton prices are also under pressure as the ongoing economic slowdown in Europe and the United States has reduced consumer demand for textile products.