Cotton price is expected to increase in the range of 8-10 per cent for the ongoing cotton season following strong demand from both domestic as well as international markets, according to a report.
The cotton price is expected to increase with a marginal cut in the production estimate and producers increasing prices following rising prices of man-made fibres, which went up due to high crude oil prices, Care Ratings said in a report.
Also, it said, demand for raw cotton as well as cotton yarn in the international markets, mainly China and Bangladesh, has been on an upward trend and is expected to continue to increase going forward.
The prices are likely to increase in the range of 8-10 per cent for the ongoing cotton season, it added.
This downward revision in production is largely attributed to the pink boll-worm infestation on cotton crops in many states including Maharashtra, Andhra Pradesh and Telangana, it said.
The current year's output estimate is, however, still higher by about 6 per cent compared with the production in Cotton Season (CS) 2017 which stood at 350 lakh bales, it said.
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Meanwhile, Care Ratings said, in line with the cotton prices, the cotton yarn prices have also witnessed an increase during the period on back of increased demand from international markets mainly China following its trade war with the US along with rupee depreciation.
China has imposed a 25 per cent duty on import of cotton from the US and is meeting its demand by increasing imports from India, it added.