India has already begun to import cotton. In December, already about 3 lakh bales of cotton have been imported. This year as arrival of cotton has fallen post the note-ban and farmers are not selling cotton in a big way as they prefer to deal in cash, the prices of the commodity have firmed up to Rs 39,000 per candy of 355 kg in the domestic market.
According to Cotton Corporation of India (CCI) data, season’s total arrival from October to December so far has reached 7.5 million bales, denoting a drop compared to the 10 million bales in 2015. Mills of South India are importing cotton from West Africa as it is comparatively cheaper than Indian cotton by almost Rs 6,000-7,000 per candy. According to industry sources, cotton prices may not fall in the near future as daily arrival is still below expectation.
Post demonetisation, prices of cotton have gone up and against it, supply has decreased as farmers are not selling cotton in a big way. On the other hand, international prices are ruling lower than domestic cotton prices. This has encouraged the mills to import early this year.