- 19 Sep 2022
- ICICIdirect Research
Cotton prices in India dip further
Cotton prices in India have declined by ~ 13% since last week to Rs 196/kg on anticipation of a better crop in CS 2022-23. The prices are now down more than 30% from their peak of Rs 290/kg (May 2022). International cotton prices have also softened by 7% to US$1 per pound since last week.
As per various industry estimates, if crop condition across cotton-growing states remains normal without any impact of heavy rains in October or further pest attacks, the industry is expecting more than 35 million bales (170 kg per bale) production in the upcoming 2022-23 season against 31.5 million bales in the current season. Higher production of cotton would lead to further softening of prices of cotton, which is expected to benefit Indian players operating in the textile value chain. With cotton crop in the US and Pakistan being impacted by unfavourable climatic conditions, Indian cotton textile and clothing exporters should witness improved global competitiveness. However, near term challenges such as a slowdown in key export markets (UK retail sales down 1.6% MoM in August) could impact demand.