Cotton demand expected to increase due to crude oil inflation
By yash chouhan 2026-03-21 12:11:52
Rising crude prices could bring cotton back in demand
With prices of man made fibres (MMF) such as polyester moving up in tandem with crude following the ongoing war in West Asia, cotton stake holders see demand coming back to the natural fibre. Polyester fibre prices have moved up by 10-25 per cent within days of crude moving up.
Taking these developments in account, the Cotton Association of India expects consumption of cotton to go up by 10 lakh bales for the current season 2025-26 ending September, compared to projections made in January.
The prices of man made fibres have gone up substantially because of this war, which has resulted in higher crude prices. So, many mills which are in man made fibres or have converted to man made fibres may come back to cotton, said Vinay N Kotak, President, CAI.
Further, the rising international prices of cotton and the weakening of rupee against the dollar has also made the cotton imports costlier, he said.
Cotton futures on ICE have gained from around 60.65 cents per pound in early March to a high of 69.34 this week before easing to current levels of 67.77.
Following the firming trend, Cotton Corporation of India has revised upwards the prices by ₹1,400 per candy in the past few days. CCI has increased the prices in three instances of ₹500, ₹700 and ₹200 totalling ₹1,400 per candy of 356 kgs in the past few days.
CCI chairman and managing director, Lalit Kumar Gupta said the increase in sale price is in line with the global trend and that there was good demand coming for cotton. CCI has procured over 1.04 crore bales of 170 kg each at minimum support price during the 2025-26 marketing season.
Recently the demand for Indian cotton yarn has gone up from countries such as China, Bangaldesh and Vietnam with disruption in the global supply chain due to the ongoing war.
Ramanuj Das Boob, a sourcing agent in Raichur said the prices of man made fibres like polyester have gone up by ₹10-30 per kg following the rise in crude prices. Unlike cotton MMF prices are fully dependent on petrochemicals and are likely to remain volatile. Balance between cotton and MMF will depend on crude stability.
Futher Ramanuj Das Boob said CCI has been able to sell around 1.5-1.6 lakh bales per day despite increase in prices. Millers with immediate requirement are buying and that too on a need basis as most do not want to take positions consideirng the prevailing uncertainty over the war scenario, he said. Also, there some resistance for buying at higher prices for yarn and cloth, he added.
Cotton has been facing increasing competition from man made fibres in the recent years. According to the International Cotton Advisory Council (ICAC) World Textile Demand report, cotton’s market share in global fibre consumption has dropped to below 25 per cent in recent years from nearly 40 per cent in the early 2000s.
