India's cotton prices fall, production may drop sharply next year

In the past week, Indian cotton yarn prices finally stabilized after falling for several consecutive weeks, and cotton prices fell again due to the surge in production.　　 During the week, Indian cotton yarn prices generally rose by 1-2 rupees/kg. After the previous cotton yarn prices fell sharply, downstream textile companies’ purchases of cotton yarn began to increase. Up to now, cotton yarn prices are still down 14% year-on-year.　　 Affected by the year-on-year increase in new cotton production, cotton prices in India continued to fall. The reason for the increase in cotton production this year is the substantial expansion of cotton varieties, the increase in yields and the abundant monsoon rains. The Indian Cotton Association predicts that India's cotton production in 2019/20 will increase by 13% year-on-year, which is in line with the increase expected by the US Department of Agriculture.　　According to analysis, the government’s increase in the purchase price of MSP led to the expansion of India’s cotton planting area. However, due to the drop in cotton prices this year, cotton farmers’ income is likely to decrease, so next year’s planting area and output may be significantly reduced.　　According to CAI’s forecast, India’s cotton exports are unlikely to increase this year because the price of Indian cotton is higher than the overall international cotton price. However, industry organizations are currently lobbying the government to resume trade with Pakistan. Pakistan's domestic import demand has increased significantly due to a sharp drop in cotton production, and textile mills are importing large amounts of cotton from Brazil.　　 Keywords in the article: 　Indian cotton yarn export prices fell