The cotton prices in India, especially Shankar-6 have increased in past six months. From 35,333.33 INR/Candy in September 2020 (1st week), Shankar-6 prices grew 25.5 per cent to 44,360.00 INR/Candy in February 2021 (3rd week). Usually, the prices remain lower compared to international prices by 6-7 cents per pound. But in 2020, they were 9-10 cents higher.
This price fluctuation impacts the profitability of Indian yarn manufacturers. According to the USDA, the global cotton production moved down in 2020-21 with relatively less cotton production in some of the major cotton producing countries such as Mali, Pakistan, and Greece. The mill consumption of cotton has increased in China and India. Also, the Indian rupee depreciated a lot in November 2020 and December 2020. Lower production, high mill consumption and rupee depreciation increased the price of cotton in both domestic and international markets. The prices of Shankar-6, a popular Indian cotton variety and benchmark of cotton in India, also followed the same trend in 2020.
This cotton is produced in the Indian state of Gujarat. In 2021, the delayed arrival of cotton, rising demand of mill use, and higher MSP (minimum support price) have further supported the price of Shankar-6.