Fall in cotton prices continues, farmers are avoiding selling in anticipation of price rise
Cotton Prices: In most of the mandis of Maharashtra, the price of cotton is higher than the Minimum Support Price (MSP), yet farmers are waiting for higher prices. Due to this, the arrival of cotton in the markets is decreasing.
The decline in cotton prices has been going on for two months. On the other hand, farmers feel that cotton prices will definitely rise due to low production this year. Due to this estimate of farmers, the arrival of cotton in the markets is also decreasing at present.
According to Cotton Association of India (CAI) data, cotton (Kapas Shankar 6) prices have fallen by about 8 percent in the last two months. Cotton prices have fallen to Rs 16,057 per quintal. Whereas two months ago on March 15, 2024, the same cotton was being quoted at Rs 17,434 per quintal. Whereas, a year ago the price of Shankar 6 variety cotton was Rs 16,759 per quintal.
According to experts, if the decline in cotton prices continues like this, it may cause problems for the farmers. Whether they store it or sell it, they may have to face problems. In most of the mandis of Maharashtra, the price of cotton is higher than the Minimum Support Price (MSP), yet farmers are still waiting for higher prices. Due to this, the arrival of cotton in the markets is decreasing.
According to the new estimates of the Cotton Association, during October-March, cotton exports had increased by 137 percent to 18 lakh bales. Whereas in the same period last year, exports were 7.59 lakh bales. According to the new estimate of CAI, there is a possibility of a further decrease in the arrival of cotton in the coming time because out of the production of 323.1 lakh bales in the year 2023-24, about 280.6 lakh bales have arrived.
There is no major change in the price of cotton in the futures market also. According to SMC Commodity Research, currently, cotton is seen trading at Rs 56,000-57,500 per candy (one candy is 355 kg) on MCX. On the other hand, cotton (April 2025) futures prices are expected to trade in the range of 1,530-1,580.
Cotton prices continue to fall in the markets of Maharashtra. However, considering the low production of cotton this year, it is estimated that its prices may go up to Rs 9,000 to Rs 12,000 per quintal like in 2021 and 2022.
With higher cotton crops expected in the US, Brazil, and Turkey for the 2024–25 season beginning on August 1, cotton prices around the world are declining. The global cotton market is currently experiencing bearish sentiment, according to Fitch Solutions research agency BMI. This is primarily because of the expectation of higher US production in 2024–25, which will lead to a production recovery.
Cotton production in the United States is predicted to rise to 160 lakh bales (204.9 bales, or 170 kg) in the 2024–25 season, according to the US Department of Agriculture (USDA). An estimated 119 million US bales (217.72 kg) will be produced globally next season.
The USDA expects good cotton crops in the US, Brazil, and Turkey to offset lower crops in China and India. Due to good crops in America, cotton prices have been decreasing since February this year. Due to this, cotton prices have been affected in India also. Ramanuj Das, vice-president of All India Cotton Brokers Association, says that the price may remain stable in the range of Rs 57,500 to Rs 59,000 per candy.
