Cotton Association of India - India is estimated to produce 34.1 million cotton bales (170 Kgs each), this season (October 2016-September 2017). Mumbai-based Cotton Association of India (CAI) yesterday, released the estimate, as the country was experiencing steady increase in cotton price. The total available supply this year will be 40.4 million bales.
While there will be slight increase in crop production this year by about 300,000 bales against last year, organized sector mill consumption will decrease and will be about 25.6 million bales. Last year, mills' estimated consumption was about 27.5 million bales. The current year will end with a surplus of about 11.4 million bales.
Given that production will remain almost same as last year, with the expected lower consumption, based on demand-side economics, price should not see steady rise. However, the lack of supply during the current peak arrival timeframe is the main cause for such price volatility.