Cotton prices surged approximately 4% this week on the Multi Commodity Exchange (MCX), driven by strong international buying interest ahead of the festive season production cycle.
Buyers from China, Bangladesh and Vietnam have been placing aggressive orders, tightening supply from Indian exporters. The Shankar-6 variety, which dominates Indian exports, was quoted at ₹61,200 per candy in major trading centres including Rajkot and Ahmedabad.
Industry analysts attribute the rally to a combination of lower-than-expected arrivals from the Vidarbha and Telangana cotton belts, where unseasonal rainfall has delayed harvesting by nearly three weeks.
"The demand side remains very strong. Spinning mills in Coimbatore and Tirupur are running at near full capacity and are building inventory for the October–December peak period," said a senior trader at the Rajkot Cotton Association.
The Cotton Association of India (CAI) has slightly revised its crop output estimate downward to 310 lakh bales for the current season, compared to 330 lakh bales last year, adding further support to prices.
Exporters are cautiously optimistic. With the rupee remaining relatively stable against the dollar, Indian cotton continues to be competitively priced in the global market. However, traders warn that a sudden surge in arrivals from Madhya Pradesh could cap the upside.
Market participants will closely watch the US Department of Agriculture's (USDA) upcoming supply and demand report, which could set the tone for global cotton trade in the coming weeks.