As cotton futures on ICE ease, domestic resellers and multinationals have started selling stocks of the fibre crop at rates lesser than those set by the Cotton Corporation of India (CCI). This is even as the demand remains weak.
ICE cotton futures had gained around 47 per cent since early February this year. From around 60.52 cents per pound on February 9, cotton futures had touched a recent high of 88 cents on May 11, before retreating to levels of 76-77 cents due to various factors like improving weather prospects in the US and Brazil, decline in crude oil prices, stronger US dollar Index and uncertainty around global demand recovery.
Prices of Indian cotton in the physical market also corrected following the easing trend in futures, but the decline remained limited compared to international markets due to lower arrivals, tightening spot availability, and higher domestic basis levels, said Anand Popat of CotYarn Trade Link in his weekly newsletter. The Indian basis, the difference between the spot prices and the futures, against ICE July further strengthened to 8.55 cents per pound, indicating that Indian cotton continues to trade at a premium over global futures, he said.
Technically weak
“CCI still holds sizeable unsold stocks, which may continue to influence domestic market sentiment in the coming weeks. Overall, the market remains technically weak in the short term, but strong Indian basis levels and tightening domestic supply may continue to support Indian cotton prices relative to global markets,” Popat said.
CCI, which began selling the 2025-26 crop procured at the minimum support price of around ₹57,200 per candy of 356 kg, reduced the prices initially to about ₹54,600 and subsequently increased the prices gradually to up to ₹68,600 tracking the global price trend. However, CCI stopped selling cotton from May 22 due to technical reasons.
CCI, which procured about 105 lakh bales of 170 kg each during 2025-26 season, has sold around 72 lakh bales, so far. Stocks with the CCI are estimated at around 33 lakh bales, as per trade sources.
Yarn market dull
“There’s huge volatility in prices. Resellers and multinationals have started selling at prices lesser by ₹2,000 per candy than the CCI list price. There are no buyers in the market. Buyers are abstaining from the market for both cotton and yarn,” said Ramanuj Das Boob, a sourcing agent in Raichur.
The yarn market is also dull as there is no buyer. The yarn prices, which had moved up following the rise in crude oil prices, have also come down by ₹30-35 per kg, Boob said.
Trade body Cotton Association of India (CAI) said Tuesday that it expects cotton acreage to rise by around 7 per cent in the upcoming kharif cropping season as farmers, encouraged by the remunerative prices.
Cotton was planted on 114.82 lakh hectares during 2025-26, according to data from the Agriculture Ministry. For the 2026-27 marketing season, the Centre has increased minimum support price by ₹557 per quintal to ₹8,267 for medium staple and ₹8,667 for long staple.