Global cotton prices are trading at a seven-year high and the Indian cotton prices are not too far away from all-time highs that hit in the month of July.
Prices saw 3 percent gains in this week itself and were up by 10 percent in the previous month. The global prices have surged past 97 cents a bushel. The strength comes in as the markets are looking at lower supplies in the global market and there's a very strong renewed demand that is coming in from the textile industry.
The world cotton stocks are estimated to be at around 89.3 million bales for 2021-22. This is the lowest in the last three years and while the global production is expected to gain by 5 percent to 118 million bales - that is still much lower than the pre-pandemic level.
In the Indian market, even as the crop is expected to be stronger, the export numbers have surged by 54 percent as compared to the previous year. So, all of those factors continue to support cotton prices.
Watch the accompanying video of CNBC-TV18’s Manisha Gupta for more details.
(Edited by : Dipika Ghosh)