Indian cotton prices hard to decrease with slower sowing progress

Since Mar 2019, Indian cotton, S-6, 1-5/32, has welcomed a round of rise, and its price spread with Pakistani cotton, Grade-3, 1-1/16, and Brazilian cotton, M 1-1/8, enlarges obviously. In May, global cotton prices move lower overall, but the decrement of Indian cotton is limited, and prices present firmness. The firm prices may be supported from the supply side, under the influences of lower 2018/19 cotton output and the slower planting progress dragged down by less rainfall.

According to the latest report of USDA, Indian cotton output is projected at 25.50 million bales (480 pounds per bale) in 2018/19 season, down 12% or 3.50 million bales from last season, while demand is supposed to be 24.8 million bales, up 2.7% or 650,000 bales. Therefore, ending stocks are estimated to decrease by 22.8% to 7.125 million bales. The lower stocks give obvious support to domestic cotton prices.

Besides, the time for the price rise from Mar is corresponding to its domestic cotton crop growing period.