India: CCI offloads over half of 2025-26 cotton stocks amid firmer prices

• Faster stock liquidation reduces govt supply overhang in market
  
  
• Muted spinning mill demand continues to limit aggressive buying
  
  

The Cotton Corporation of India (CCI) has sold over half of the cotton procured in the 2025-26 season after procuring close to 100 lakh bales under the Minimum Support Price (MSP) mechanism. Procurement had risen during peak arrivals, as kapas prices fell below support levels and private trade participation remained weak. As arrivals declined and prices began to firm, the agency stepped up sales, releasing stocks steadily into the market and easing supply-side pressure.

However, even as CCI offloaded its stocks, domestic lint prices strengthened across key markets. This marks a notable shift from previous years, where large government-held stocks tended to weigh on prices for longer periods.

Demand remains cautious amid weak yarn offtake

Buying interest from spinning millers has remained largely need-based despite firmer cotton prices. Mills continue to operate with low inventory levels due to weak yarn demand in both domestic and export markets.

CCI initially faced resistance in placing stocks, as its offer prices were above market parity. The agency responded with multiple price revisions, aligning rates closer to prevailing domestic and import benchmarks to stimulate buying. Imported cotton, particularly from Brazil, remained competitive during parts of the season, further influencing mill procurement strategies.

Outlook hinges on demand recovery

With a significant portion of stocks already liquidated, CCI's market influence is expected to gradually decline. While lower arrivals are supporting prices, sustained upside will depend on a recovery in yarn demand and export activity.

Until demand improves, spinning millers are likely to continue cautious procurement, keeping the cotton market balanced in the near term.