Weak demand and easing global cotton futures lead to discounted cotton sales in the domestic market

Domestic cotton resellers and multinational companies have started offering cotton stocks at rates lower than those set by the Cotton Corporation of India (CCI) following a correction in ICE cotton futures. The decline comes amid continued weak demand in the domestic market.

ICE cotton futures, which had gained around 47 per cent since early February, moved from approximately 60.52 cents per pound on February 9 to a recent high of 88 cents on May 11. Prices later corrected to 76–77 cents due to improved weather prospects in the United States and Brazil, a decline in crude oil prices, a stronger US dollar index, and uncertainty surrounding global demand recovery.

According to Anand Popat of CotYarn Trade Link, prices of Indian cotton in the physical market also corrected, although the decline remained limited due to lower arrivals, tightening spot availability, and stronger domestic basis levels. In his weekly newsletter, Popat stated that the Indian basis, which measures the difference between spot prices and ICE July futures, strengthened to 8.55 cents per pound.

CCI Stocks Continue to Influence Market

“The CCI still holds sizeable unsold stocks, which may continue to influence domestic market sentiment. Overall, the market remains technically weak in the short term,” Popat said.

The Cotton Corporation of India, which began selling the 2025-26 crop procured at the minimum support price of around ₹57,200 per candy of 356 kg, initially reduced prices to approximately ₹54,600 before increasing them to as high as ₹68,600.

CCI stopped selling cotton from May 22. According to trade sources, the corporation procured 105 lakh bales of 170 kg each during the 2025-26 season and has sold around 72 lakh bales so far. Stocks are estimated at nearly 33 lakh bales.

Yarn Market Remains Weak

“There’s volatility in prices. Resellers and multinationals have started selling at prices lesser by ₹2,000 per candy than the CCI list price. There are no buyers in the market. Buyers are abstaining from the market for both cotton and yarn,” said Ramanuj Das Boob, a sourcing agent in Raichur.

Boob also noted that the yarn market remains weak. Yarn prices, which had increased following the rise in crude oil prices, have now declined by ₹30–35 per kg.