Indian Cotton Prices Firm on Tight Supplies, Lower Crop Outlook by Amit Gupta, Kedia Advisory
Indian cotton prices have strengthened sharply amid tightening domestic supplies, lower crop prospects and firm mill demand. Shankar-6 seed cotton prices rose 15% over the past month and were 26% higher year-on-year, while domestic lint prices increased 8% to around 92 cents per lb. USDA FAS Mumbai forecasts MY 2026/27 cotton production at 24.5 million 480-lb bales, down 3% from its previous estimate, with yields projected 2% lower at 464 kg per hectare. Mill consumption is forecast at 26.2 million bales, while cotton imports remain elevated to bridge domestic fiber shortages.
Key Highlights
• Shankar-6 cotton prices gained 15% monthly and 26% year-on-year amid low market arrivals.
• Domestic lint prices rose 8% over the past month to around 92 cents per lb.
• USDA forecasts 2026/27 cotton production at 24.5 million bales, down 3% from its previous estimate.
• Cotton yields are forecast 2% lower at 464 kg per hectare amid below-normal rainfall risks.
• Mill consumption is forecast at 26.2 million bales, supporting demand while limiting raw cotton exportable surplus.
Indian cotton prices are expected to remain firm as tightening domestic availability, lower production prospects and stronger textile demand continue to support the market. Over the past month, Shankar-6 seed cotton prices increased 15%, while prices were 26% higher than a year earlier. Domestic lint prices also advanced 8% to around 92 cents per lb, driven by tight end-of-season supplies and steady mill procurement. With domestic prices remaining close to international benchmarks, export competitiveness is likely to stay constrained.
The supply outlook has also turned more cautious. USDA FAS Mumbai forecasts MY 2026/27 Indian cotton production at 24.5 million 480-lb bales, equivalent to 5.3 million tonnes, down 3% from its previous estimate. Yield is projected at 464 kg per hectare, down 2%, as below-normal rainfall through August-September poses risks to rainfed cotton in western and central India. Cotton acreage as of July 31 stood at 10.354 million hectares, down 2% year-on-year, although planting momentum improved significantly.
Demand remains a major supportive factor. USDA has raised its MY 2026/27 domestic mill consumption forecast to 26.2 million bales, supported by stronger textile and apparel export orders. Cotton yarn exports during August-June increased 9% year-on-year, while yarn prices gained 7% over the past month alongside higher raw-fiber costs. Meanwhile, cumulative cotton imports rose 72% year-on-year, reflecting mills' need to supplement domestic supplies.
The government has temporarily waived the 11% import duty on raw cotton through October 31, helping mills manage tight fiber availability.
Tight domestic supplies, lower yield expectations and firm mill demand are likely to keep Indian cotton prices elevated, despite improved acreage and rising imports.
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