Globally, cotton prices have fallen to a five-year low. And as fall in cotton sowing this season is expected, textiles mills and spinners are taking a wait-and-watch approach to stocking the commodity, as they feel supply will improve and prices will fall in a couple of months, when the new crop arrives. International Cotton Advisory Committee (ICAC) has said, “Though the monsoon has arrived in India, the volume of precipitation has varied widely and yield is likely to suffer in some places.” The committee has estimated India’s cotton crop will fall about 10 per cent this year. ICAC and the US department of agriculture (USDA) have pegged India’s 2014-15 cotton production at about 35 million bales. It also says that in 2014-15, there will be a sharp fall in cotton exports, “primarily driven by a 26 per cent fall in imports by China at 2.2 million tonnes. It is likely India’s exports will fall to 800,000 tonnes, less than half the exports in 2013-14”. The fall in exports is likely to make good the drop in production and, as global demand is slack, demand for yarn could also fall. Yarn spinners have preferred to wait, as stockpiling has already started due to a fall in exports.
