An Exclusive Interview with Shree Atul Ganatra on the Current Cotton Scenario
Indian Cotton Crop and Stocks on an Upward Trend
According to Shree Atul Ganatra, as of 21st February, around 250 lakh bales of cotton have arrived across India. However, nearly 30–40% of the crop is still held by farmers, mainly in Gujarat and Maharashtra. The total cotton production for the current season is expected to reach 315–320 lakh bales, reflecting a significant increase compared to last year.
Last year’s closing stock was estimated at 60–65 lakh bales, while this year it is projected to rise sharply to nearly 100 lakh bales. This increase is primarily driven by two factors:
Availability of cheaper imported cotton between October and December 2025, during which no import duty was imposed.
The pricing policy of the Cotton Corporation of India (CCI), which kept domestic cotton prices higher than global levels, prompting textile mills to shift towards imported cotton.
CCI’s Procurement and Sales Policy
CCI continues to procure cotton under the Minimum Support Price (MSP) scheme, resulting in higher procurement costs. However, during sales, CCI guarantees only limited quality parameters such as staple length and micronaire. In contrast, private ginners offer comprehensive quality specifications in their contracts.
It is estimated that CCI may end up holding nearly 50 lakh bales of unsold stock this year. Furthermore, continued MSP procurement is likely to encourage farmers to increase cotton sowing, potentially expanding the area from 110 lakh hectares to 125 lakh hectares—an increase of 15–20%.
Indian Mills and Operational Challenges
Currently, Indian spinning mills are maintaining an average inventory of about 90 days, with several large mills having coverage until September.
Labour shortages have reduced operational efficiency, with mills running at only about 85% of their capacity. Smaller mills, particularly those with less than 10,000 spindles, are increasingly shifting towards synthetic fibers. Reports suggest that nearly 300 mills have shut down in Tamil Nadu over the past two years.
Global Market Pressure
In the international market, Intercontinental Exchange (ICE) cotton futures are trading at 63–65 cents per pound, indicating relatively lower global prices. Brazil’s record production of approximately 200 lakh bales has further exerted pressure on U.S. cotton prices.
Additionally, ongoing U.S.–China trade tensions have weakened demand, as China has reduced imports of U.S. cotton. As a result, ICE prices have softened to around 64 cents per pound (approximately ₹45,000 per candy), which is significantly lower than Indian cotton prices at around ₹55,000 per candy.
Challenges for Ginning Factories
India has nearly 4,000 ginning factories, but CCI is operating through only about 1,000 units. This has created a major bottleneck in the system, forcing many factories to operate below capacity or shut down temporarily.
Recommendations to the Government
To address these challenges, Shree Ganatra has suggested the following measures:
- (a) Replace MSP procurement with Direct Benefit Transfer (DBT) under the Bhavantar Yojana to provide direct financial support to farmers.
- (b) Allow CCI to procure raw cotton at MSP directly from farmers in market yards and sell it to ginners without processing.
- (c) Since CCI already sells cottonseed (which constitutes about 67% of kapas) immediately, it should also sell 100% of raw cotton directly to ginners instead of undertaking ginning operations.
