Near-term prospects of cotton spinning mills look bleak. With falling acreage of cotton in India and easing global demand for yarn, the differential in prices between domestic and overseas markets is an additional challenge.
Cotton prices fell 18% in international markets in the past fortnight, but domestic prices, which normally follow suit, have so far fallen only 5%. Perhaps, news of lower cotton acreage and decade-low productivity in the current season is keeping prices elevated. The Cotton Advisory Board of India’s estimate of cotton output of 343 lakh bales (one bale is equal to 170 kilograms) for cotton season (CS) 2019 is lower than the year-ago figure, which itself was a 12-year low.