India Government Faces Downward Pressure On Domestic Cotton Prices

As domestic cotton prices have no intention of falling, the central government of India has increased the pressure on domestic cotton prices to link up with international cotton prices.

Recently, the industry called on the central government to order the India Cotton Corp (CCI) to reduce the price to about 20000 rupees (365 kilograms), which is the current international price.

In 2008-09, the minimum supporting price (MSP) increased by 40%, leading to the domestic cotton price rising to 22500 rupees / candy.

By the end of February, the number of new cotton arrivals may be reduced, and the domestic textile industry is in an unprecedented crisis. They hope that prices will be in line with international prices.

According to the Cotlook A index, the international cotton price is at least 1000-2000 rupees lower than the price of India Shankar- 6 cotton, which is the most popular species in the India subcontinent.

The domestic textile industry consumes about 24 million bales of cotton per year (170 kilograms), but now the factory is unable to purchase cotton according to the prevailing market price.

At present, the quantity of cotton purchased by textile mills is reduced by 1/3 compared with 2007-08.

Cotton prices hit 30000 rupees / candy in 2008, and the price is now 22500 rupees / candy, 1000-2000 rupees higher than the international price.

Interestingly, the 2005-2008 year Shankar-6 cotton price is 18500 rupees / candy, which is about 6-7 cents per pound lower than the international market price.

At present, the minimum supporting price has increased by 40%. Since November 2008, the price of Shankar-6 cotton has been 5 cents higher than that of the international market.

Editor in charge: Yang Jing