The cotton market is beginning to show signs of pressure, top officials of the Cotton Association of India (CAI) said. According to Nayan Mirani, its outgoing president, there is going to be a lot of cotton the world over.
“Cotton prices are likely to witness a depressing trend. The supply situation will dictate the price, while other factors may also factor into the price situation,” he said, addressing the 95th AGM of the association. “In spite of reports of losses due to recent hurricanes in the US cotton belt, the size of the US crop is expected to be larger. Indian acreage for the current season (October 2017-September 2018) is expected to jump by about 12% compared to last year. Expecting yield to increase by about the same percentage points, India will have a bumper crop. If this scenario turns out to be correct, it may create a situation that will warrant India government to support farmers by kicking in the minimum support price (MSP) operations.”
Among many factors that have led to the increase in Indian acreage, an important aspect has been the shift from oil seeds and pulses to cotton due to lack of remunerative prices. There has been a stagnancy in prices of these commodities, and the government had to apply MSP for these products, he said. According to Mirani, the cotton price is under pressure, as the mill demand is not high. To exacerbate this situation, a confusion is prevailing with regard to the implementation of the GST.