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Cotton Yarn Industry Margins Expected to Improve by 150-200 Basis Points Following Strong Q4 Recovery: CareEdge RatingsAfter facing headwinds for nearly three years, the Indian cotton yarn industry has recorded a significant recovery in the fourth quarter of the 2026 fiscal year (Q4 FY26). According to a recent report by CareEdge Ratings, the industry's operating profitability margins are likely to improve by 150 to 200 basis points in FY27, driven by favorable demand-supply dynamics and improved pricing.The report attributes this recovery to several positive factors. These include a reduction in uncertainties regarding US tariffs, rising orders from garment and home textile exporters, a revival in demand from China, and an improved business environment surrounding potential Free Trade Agreements (FTAs) between India and the UK, as well as India and the European Union (EU).CareEdge Ratings stated that the balance between demand and supply, along with a favorable pricing environment, is expected to persist into FY27. However, the outlook beyond that period will depend on demand from China, fluctuations in cotton prices, geopolitical developments, and the pace of recovery in downstream consumption globally.The report also highlights significant structural changes on the supply side of the industry. Over the past few years, capacity amounting to approximately 10–12 million spindles has exited the market, reducing the effective capacity to around 40–44 million spindles. This has improved the demand-supply balance for organized players and made pricing more sustainable.Cotton yarn spreads have also witnessed a significant increase due to improved demand, limited supply, and stable cotton prices. The spread, which stood at approximately ₹95–100 per kg in FY26, has risen to ₹120–125 per kg. According to the report, the removal of import duty on cotton until October 31, 2026, will help maintain a balance between domestic and global prices, potentially sustaining favorable conditions for spreads into the 2027 fiscal year.CareEdge Ratings projects that the revenue of the Indian spinning industry will grow by approximately 10 percent year-on-year in the 2027 fiscal year. Of this, 3 to 4 percent of the growth is expected to stem from production or volume expansion, while the remainder is likely to be driven by improved sales realizations.READ MORE :- Delayed Monsoon Raises Crop Risk in Gujarat; Farmer Compensation Crosses ₹22,700 Crore

Delayed Monsoon Increases Agricultural Risk in Gujarat; Crop Loss Compensation Exceeds ₹22,700 Crore Over a DecadeA weak start to the monsoon in Gujarat has heightened concerns among farmers. By June 16, the state recorded rainfall 83 percent below normal, with the deficit reaching 100 percent in nine districts of the Saurashtra region. This situation indicates that the monsoon's arrival in the state has not only been delayed but has also been uneven and weak. Consequently, there are growing fears of an adverse impact on the sowing and early growth stages of Kharif crops.Despite the rainfall deficit, farmers have commenced sowing operations. So far, Kharif crops have been sown across approximately 4.27 lakh hectares, representing about 5 percent of the normal Kharif acreage. Cotton and groundnut are the primary crops; farmers have sown cotton on roughly 2.39 lakh hectares and groundnut on 1.36 lakh hectares. However, if adequate rainfall does not occur in the coming days, these early crops could face moisture stress, potentially affecting both germination and overall yield.The current situation is part of a broader pattern of increasing climate uncertainty in the state. According to government data, the Gujarat government has distributed a total of ₹22,733 crore in compensation to farmers for crop losses between the 2016 and 2026 fiscal years. This amount was disbursed to offset losses caused by unseasonal rain, excessive rainfall, cyclonic storms, and other weather-related disasters.A significant rise in relief payouts has been observed over the decade. Compensation stood at just ₹279 crore in the 2016 fiscal year, rising to ₹2,906 crore by the 2021 fiscal year. By the 2026 fiscal year, the figure had surged to a record ₹10,337 crore. Approximately 46 percent of the total relief amount was disbursed in the 2026 fiscal year alone, highlighting the severity of weather-related losses in recent years.Over the past decade, around 1.36 crore farmers have received assistance for crop losses; this figure includes many farmers who received relief on more than one occasion across different years. Of the total relief amount, ₹15,829 crore was provided through the SDRF, while ₹6,904 crore came from the state government's budget. These figures clearly indicate that climate risks are becoming an increasingly significant challenge for the agricultural sector, thereby intensifying the economic burden on both farmers and the state.READ MORE :- Rupee Opens 11 Paise Higher at 94.45 Against US Dollar

The rupee opened 11 paise higher at 94.45 against the USD.On Wednesday, the Indian rupee opened 11 paise higher against the dollar at 94.45, whereas it had closed at 94.56 on Tuesday.READ MORE :- Cotton and Soybean Sowing Falls Behind Last Year Despite Higher MSP; Monsoon Key Concern

India's Cotton and Soybean Sowing Lags Despite Higher MSP; Monsoon Emerges as Key Risk FactorIndia's kharif sowing season has started on a subdued note for both cotton and soybean, with acreage trailing last year's pace despite the Centre announcing higher Minimum Support Prices (MSP) for the 2026-27 season. According to the latest data released by the Ministry of Agriculture, cotton has been sown across 9.53 lakh hectares as of June 12, compared with 13.19 lakh hectares during the same period last year, a decline of 3.66 lakh hectares. Soybean sowing stands at **0.70 lakh hectares, down by **0.20 lakh hectares from 0.90 lakh hectares a year ago.The slower planting pace comes even after the government increased the MSP for cotton by ₹557 per quintal and soybean by ₹380 per quintal, a move aimed at encouraging acreage expansion and supporting farmer returns. However, the higher MSP has so far failed to translate into increased sowing, highlighting the dominant influence of weather conditions over crop economics during the early kharif season.Market participants attribute the decline primarily to inadequate and uneven rainfall across major producing states, including Maharashtra, Madhya Pradesh, Gujarat, Telangana and Rajasthan. In several districts, farmers are delaying sowing operations until they receive sufficient and sustained monsoon showers to ensure proper germination and crop establishment.The coming two to three weeks are likely to be critical for both crops. While acreage gaps can still be recovered as peak sowing season extends through June and early July, any prolonged weakness in monsoon activity could begin affecting not only sowing progress but also yield potential and overall production prospects. Traders and industry experts will closely monitor rainfall distribution, reservoir levels and weekly sowing updates, as weather remains the single most important factor determining the outlook for India's 2026-27 cotton and soybean crops.READ MORE :- The rupee appreciated by 7 paise against the dollar to close at 94.56.

After opening at 94.63 in Tuesday's morning trade, the Indian rupee gained 7 paise against the US dollar to close at 94.56.At the close, the Sensex was up 544.15 points (0.71%) at 76,808.48, and the Nifty rose 135.25 points (0.57%) to 23,989.15. Approximately 2,275 shares advanced, 1,795 shares declined, and 151 shares remained unchanged.READ MORE :- India's Cotton Carry-Forward Stock Seen Rising 42% on Higher Duty-Free Imports

India's Cotton Carry-Forward Stock Likely to Rise 42% Driven by Surge in Duty-Free ImportsAccording to investment advisory firm Kedia Advisory, India's cotton carry-forward stock for the 2026-27 season is projected to rise by 42%, exceeding 85 lakh bales. This increase is attributed to the sharp rise in imports following the government's decision to waive import duties on cotton.Experts believe that increased imports will improve cotton availability within the country, ensuring the next season begins with a robust opening stock. This will provide the domestic textile industry with greater security regarding raw material supplies.According to the Cotton Association of India (CAI), cotton imports in the 2025-26 marketing season could reach 60–65 lakh bales (170 kg per bale). This is significantly higher than the earlier estimate of 47 lakh bales. By the end of May, imports had already reached 43.5 lakh bales, marking an increase of approximately 32% compared to the same period last year. Industry experts estimate that the duty exemption could lead to the import of an additional 15 lakh bales of cotton.Consequently, India's carry-forward stock for the 2026-27 season—commencing in October 2026—is projected to stand at 85.59 lakh bales, up from approximately 60 lakh bales in the previous season. This represents a likely increase of around 42% in stock levels.The CAI has maintained its estimate for the country's cotton production in the 2025-26 season at 334 lakh bales. Cotton pressing stood at 322.35 lakh bales by the end of May, while exports for the entire season are estimated at 10 lakh bales. Although the price gap between domestic and global cotton is narrow, textile mills continue to prefer imported cotton. Industry sources indicate that imported fiber yields superior quality yarn—estimated to be about 4% better in quality. Furthermore, yarn produced from imported cotton commands a market premium of approximately ₹7 per kilogram, making it a more profitable option for spinning mills.By the end of May, the country's total cotton stock was estimated at 191.44 lakh bales. Of this, mills held around 82 lakh bales, while the remainder was distributed among the Cotton Corporation of India, traders, ginners, and multinational companies.Analysts believe that high levels of imports will bolster cotton availability in the domestic market, help meet the textile industry's demand for high-quality raw material, and further strengthen supply security for the 2026-27 season.READ MORE :- Surendranagar Cotton Merchants Discuss Market Trends, NCDEX Risk Management Strategies

Surendranagar Cotton Merchants Discuss Market Trends and Risk Management at Association MeetingAn important meeting of the Surendranagar Cotton Merchant Association was held at Hotel President, bringing together cotton traders and industry stakeholders to discuss the current cotton market scenario, trade prospects, and future business opportunities.The meeting was attended by association members including Y.B. Rana, Nareshbhai Sangeetham, Ajitsinh Parmar, Chandrasinh Parmar, Ramdevsinh Rana, and a large number of local cotton merchants.Special guests Ajaybhai Sharma and Chandan Bhagat, who visited from Mumbai under the guidance of Shaileshbhai Shah, provided detailed insights into the functioning of the National Commodity and Derivatives Exchange (NCDEX).The experts briefed participants on cotton futures trading, hedging strategies to mitigate price risks, and effective trading practices based on market trends and analysis. They also highlighted the importance of risk management and the use of modern trading tools in navigating volatile market conditions.During the interactive session, traders raised several queries and concerns related to cotton trading and market fluctuations. The experts addressed these questions in detail, helping participants gain a better understanding of market dynamics and risk-management techniques.The meeting served as a valuable platform for knowledge-sharing and strengthening awareness among cotton traders about emerging opportunities and best practices in the evolving cotton trade sector.READ MORE :- Bt Cotton Under Scrutiny as Pink Bollworm Threatens Cotton Farming

The Crisis in Cotton Cultivation and Questions Surrounding Bt CottonCotton cultivation is becoming increasingly less profitable across many cotton-growing regions in India. Concurrently, concerns among farmers and agricultural organizations regarding the genetically modified (GM) crop, Bt cotton, have mounted. Recently, the All India Kisan Sabha (AIKS) highlighted a sharp decline in cotton production within Haryana's cotton belt. According to the organization, escalating attacks by the pink bollworm have severely damaged Bt cotton crops—crops that were originally marketed to farmers as pest-resistant.Data indicates a significant reduction in the area under cotton cultivation in Haryana over the past few years. Similar issues have surfaced in major cotton-producing states such as Punjab, Rajasthan, and Maharashtra. Many farmers report having to use larger quantities of pesticides for pest control, thereby driving up cultivation costs.Various research studies have also raised questions regarding the long-term efficacy of Bt cotton. A study published in 2020 revealed that farmers in many regions are spending more on pesticides than they did prior to the introduction of Bt cotton. A 2022 survey conducted in Telangana found that the majority of farmers complained of pink bollworm infestations, which adversely affected both production and income.Critics argue that the initial benefits of Bt cotton have diminished over time. They contend that the observed increase in yields was not solely due to Bt technology but also resulted from improved irrigation, favorable weather conditions, and the use of advanced hybrid seeds. Furthermore, the growing control of large corporations over the seed market and the dwindling availability of non-Bt seeds are also viewed as matters of concern.Based on these experiences, many experts are advocating for the promotion of sustainable alternatives such as agroecology, crop diversification, and integrated pest management. They believe that a re-evaluation of the current cotton production system is essential to ensure farmers' income, environmental balance, and the long-term sustainability of agriculture.READ MORE :- Rupee Opens 8 Paise Higher at 94.63 Against US Dollar

The rupee opened 8 paise higher at 94.63 against the USD.On Tuesday, the Indian rupee opened 8 paise higher against the dollar at 94.63, whereas it had closed at 94.71 on Monday.READ MORE :- The rupee lower by 03 paise against the dollar to close at 94.71

On Monday the Indian Rupee lower by 03 paise to close at 94.71 against the US dollar, after opening at 94.68 in morning trade.At close, the Sensex was up 736.38 points or 0.97 percent at 76,264.33, and the Nifty was up 231 points or 0.98 percent at 23,853.90. About 2973 shares advanced, 1245 shares declined, and 185 shares unchanged.read more :- Aravalli Farmers Begin Groundnut, Cotton Sowing Despite Rain Uncertainty

The Crisis in Cotton Cultivation and Questions Surrounding Bt CottonCotton cultivation is becoming increasingly less profitable across many cotton-growing regions in India. Concurrently, concerns among farmers and agricultural organizations regarding the genetically modified (GM) crop, Bt cotton, have mounted. Recently, the All India Kisan Sabha (AIKS) highlighted a sharp decline in cotton production within Haryana's cotton belt. According to the organization, escalating attacks by the pink bollworm have severely damaged Bt cotton crops—crops that were originally marketed to farmers as pest-resistant.Data indicates a significant reduction in the area under cotton cultivation in Haryana over the past few years. Similar issues have surfaced in major cotton-producing states such as Punjab, Rajasthan, and Maharashtra. Many farmers report having to use larger quantities of pesticides for pest control, thereby driving up cultivation costs.Various research studies have also raised questions regarding the long-term efficacy of Bt cotton. A study published in 2020 revealed that farmers in many regions are spending more on pesticides than they did prior to the introduction of Bt cotton. A 2022 survey conducted in Telangana found that the majority of farmers complained of pink bollworm infestations, which adversely affected both production and income.Critics argue that the initial benefits of Bt cotton have diminished over time. They contend that the observed increase in yields was not solely due to Bt technology but also resulted from improved irrigation, favorable weather conditions, and the use of advanced hybrid seeds. Furthermore, the growing control of large corporations over the seed market and the dwindling availability of non-Bt seeds are also viewed as matters of concern.Based on these experiences, many experts are advocating for the promotion of sustainable alternatives such as agroecology, crop diversification, and integrated pest management. They believe that a re-evaluation of the current cotton production system is essential to ensure farmers' income, environmental balance, and the long-term sustainability of agriculture.READ MORE :- Oil Prices Fall After US-Iran Deal Framework Announcement