Even though handled by the Cotton Corporation of India (CCI), the Indian government's cotton procurement has reached 9.4 million bales, cotton prices continue to remain below the government-set Minimum Support Price (MSP) due to weak market demand. According to Lalit Kumar Gupta, Managing Director, says, procurement is going on across all states.
Data compiled by the Cotton Association of India (CAI), shows, cumulative market arrivals for the 2024-25 crop season totaled over 21.6 million bales (170 kg each) by March 1, 2025. CAI recently lowered its crop estimate to 30.175 million bales, while initial government estimates were 29.9 million bales.
The market for raw cotton and pressed bales is struggling due to weak demand, notes Pradeep Jain, President, Khandesh Ginners Association. Raw cotton prices are currently between ₹6,500 and Rs 7,000 per quintal, below the MSP level of Rs 7,121 (medium stable). Market arrivals of raw cotton have decreased because farmers, who have 10-15 per cent of their crop remaining, are choosing to hold onto their produce due to the low prices. However, the cottonseed market is showing some improvement, with prices rising Rs 200-300 per quintal to Rs 3,300-3,400, he adds.
Atul Ganatra, President, CAI, reports, daily arrivals have dropped below 90,000 bales, with CCI purchasing 40,000-50,000 bales. Ginners are barely receiving 40,000-45,000 bales, while mills need 100,000 bales daily. So, mills have started slightly increasing their purchases to build inventory at these current prices. However, mills are not buying at higher prices and are sticking to their own price points, he explains.
Furthermore, Ganatra states, mills prefer to maintain short-term inventories, buying only for one month at a time. Every mill wants to buy for one month to keep their operations running. They have confidence because CCI holds over 9 million bales, he adds.
While there's a perception that prices will stabilize once arrivals slow down, Ganatra believes Indian cotton prices won't rise unless ICE futures (the global cotton futures market) increase. Pressed cotton prices are currently hovering between Rs 53,000 and Rs 54,500 per candy, depending on quality.
Highlighting the unique challenges in the current market, Ramanuj Das Boob, a sourcing agent in Raichur, says, despite good crop yields from a slightly reduced planting area, prices remain stagnant between Rs 52,500 and Rs 54,000, creating market uncertainty. Cheaper imported cotton is further restraining domestic prices, with Indian mills having contracted approximately 2.9 million bales for import this year, he notes.
