Cotlook Index: 01-09-2026
102.30 (+1.00)
ICE cotton corrects sharply due to profit booking, stronger dollar
Wednesday 2nd Sep 2026, (Source: www.fibre2fashion.com/news)
Insights: ICE December 2026 cotton settled at 91.55 cents, down 1.59 cent, after gaining about 13 per cent in August. A stronger US dollar, improved rainfall and profit-taking pressured prices, while crude oil strength failed to support cotton. Open interest reached 382,071, the third-highest in cotton history; USDA rated the US crop 39 per cent Good/Excellent versus 51 per cent a year earlier.
ICE cotton futures corrected sharply yesterday after powerful rally on Monday. Stronger US dollar put additional pressure on US cotton as the currency made purchases more expensive for overseas buyers. Although, crude oil further strengthened but it failed to support cotton prices. Weather concerns were also intact which earlier fuelled price rise.The most active December 2026 contract settled at 91.55 cents down 1.59 cent, leaving contract with 17 points net gain over the last two sessions. Other contracts settled lower with losses of 13 to 169 points, making net gains of 9 to 55 points over the two-session period. Trada volume was 64,416 contracts, compared with 66,014 contracts on Monday. Open interest remains exceptionally strong. Monday’s OI increased 1,860 contracts to 382,071, making it the 3rd-highest open interest level in cotton history. OI has increased in 20 of the last 22 sessions, with a huge 60,343-contract increase since July 30. The persistent OI expansion indicates substantial new participation behind the rally, although Tuesday’s trading may have included some profit-taking. The market is technically stretched after the extraordinary August advance. December 2026 gained approximately 13 per cent during August and reached its highest level in nearly two years before Tuesday’s correction. The sharp decline therefore looks more like profit-taking and technical adjustment than a clear change in the underlying trend.The stronger US dollar also pressured cotton because it makes US cotton more expensive for international buyers. Renewed Middle East tensions supported the dollar through safe-haven demand. At the same time, improved rainfall/weather in some areas has reduced part of the weather premium that had been built into prices. US crop conditions remain a major concern. USDA’s latest report showed cotton rated Good/Excellent at 39 per cent as of August 30, compared with 37 per cent the previous week and 51 per cent a year earlier. Despite the small weekly improvement, the rating remains significantly below last year. Weather remains a key factor, with earlier heat and adverse conditions contributing to concerns over crop development and abandonment, particularly in Texas. The market is also watching global weather developments and their potential impact on supply.Outside markets added volatility. Crude oil moved sharply higher, reaching a five-week high, as traders worried that the Middle East conflict could expand and disrupt supplies. Chicago wheat also remained firm towards a 3 and half year high, with Black Sea and geopolitical developments providing support.Overall, Tuesday’s decline appears to be a healthy correction after an exceptional rally. The most important factors now are whether December 2026 can hold above 90 cents, whether open interest remains elevated, how US crop conditions develop, and whether export demand can keep pace with the much higher price level.This morning (Indian Standard Time), ICE cotton for December 2026 was traded at 88.59 cents per pound (down 2.96 cent), cash cotton at 86.26 cents (down 1.69 cent), the October 2026 at 86.54 cents (down 3.47 cent), the March 2027 contract at 90.75 cents (down 2.93 cent), the May 2027 contract at 92.05 cents (down 2.87 cent), and the July 2027 contract at 91.50 cents (down 2.72 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.
India showed unexpected strength in July amid global uncertainty: Govt
Wednesday 2nd Sep 2026, (Source: www.fibre2fashion.com/news)
Insights: India continued to show unexpected strength in July amid heightened global uncertainty, with strong growth in exports, the Finance Ministry's latest Monthly Economic Review said. Easing cost pressures and firm demand conditions may support activity. Efforts to strengthen R&D, skills, supply chain resilience and enabling infrastructure will be important for supporting industrial competitiveness.
India continued to demonstrate unexpected strength in July this year amid heightened global uncertainty, with total exports of merchandise and services registering strong growth, led by robust merchandise exports, according to the Finance Ministry’s Monthly Economic Review for August. Despite external risks, India's economic activity, inflation and external position have remained relatively stable, it noted. Domestic economic activity remains steady, with resilient domestic demand providing support amid some moderation in the pace of expansion. Easing input cost pressures provided some relief to business conditions, even as heightened external uncertainties continued to cloud the outlook, the review document noted. While higher merchandise import growth widened the merchandise trade deficit, the composition of imports remained indicative of firm domestic demand. Going ahead, easing cost pressures and firm demand conditions are expected to support activity, although the external environment remains a key source of uncertainty, the review said. Overall, India's industrial sector has demonstrated resilience amid a challenging external environment, with manufacturing activity continuing to expand alongside gradual strengthening of domestic technological capabilities. Sustained efforts to strengthen research and development, skills, supply chain resilience and enabling infrastructure will be important for supporting industrial competitiveness and strengthening the capacity to respond to global disruptions, it added.
India's DGFT automates free sale certificates for exporters
Wednesday 2nd Sep 2026, (Source: www.fibre2fashion.com/news)
Insights: India's DGFT has enabled automated issuance of Free Sale and Commerce Certificates on its portal for eligible export applications. The change covers items outside the Drugs & Cosmetics Act, 1940, reducing manual routing for many certificate requests. Applications needing checks will still go to regional authorities, with risk-based review retained for oversight.
India’s Directorate General of Foreign Trade (DGFT) has enabled automated issuance of Free Sale and Commerce Certificates (FSCs) on the DGFT portal, a move aimed at easing export compliance for eligible applicants. The certificates are issued to exporters under the Foreign Trade Policy for items that are not covered under the Drugs & Cosmetics Act, 1940. Until now, such certificates have been issued by DGFT regional authorities after scrutiny and verification.
Eligible applications will now be considered for automatic issuance under the prevailing framework, without being routed for manual scrutiny. The automated mechanism is expected to cut processing time for a significant category of FSC applications and reduce the compliance burden linked to the earlier manual process. Applications that require verification, or those that do not meet the automated processing parameters, may continue to be sent to the concerned regional authority for manual processing. Some auto-approved applications may also be subsequently flagged to the concerned regional authority for review under the system’s risk management parameters. The measure is intended to reduce avoidable manual intervention, improve processing predictability and support faster issuance of FSCs for eligible exporters, while retaining verification and oversight for applications that require scrutiny. By strengthening automated, rule-based processing and applying risk-based review, the initiative is expected to make FSC issuance more efficient, transparent and predictable for exporters and administering authorities.
Global cotton output to slightly exceed consumption in 2026-27
Wednesday 2nd Sep 2026, (Source: www.fibre2fashion.com/news)
Insights: Global cotton output is forecast at 26.2 million tonnes in 2026-27, just above use, though weather and pests could cut surplus. India's crop and mill use are rising on textile export growth, while Pakistan's weaker output will deepen raw cotton import reliance. China reserve sales aid supply, but Xinjiang risks may lift imports; US acreage and Section 301 tariffs could redirect sourcing flows.
Global cotton production is projected to reach 26.2 million tonnes in 2026-27, marginally exceeding estimated consumption of 25.9 million tonnes, according to the September 2026 issue of Cotton This Month published by the International Cotton Advisory Committee (ICAC). However, early-season risks, including weather volatility and pest pressures, could narrow the projected surplus as the season progresses. Global production estimates historically decline by around 100,000 tonnes from initial forecasts once crop conditions become clearer. Under normal seasonal conditions, 2026-27 output is expected to ease to 26.0–26.1 million tonnes, while major weather disruptions or pest outbreaks could result in sharper declines. In China, state cotton reserve sales that began on July 20 have averaged around 8,000 tonnes per auction, improving near-term domestic availability. However, future reserve replenishment and potential weather risks in Xinjiang could prompt an upward revision to import demand later in the season. In India, ICAC has raised its 2025-26 production estimate to 5.5 million tonnes, up 9 per cent, while consumption is expected to reach nearly 5.9 million tonnes, up 7 per cent. Strong domestic mill demand and textile export growth are supporting the increase. The government’s five-year Cotton Mission, the Kapas Kisan app and Kasturi Cotton Bharat’s blockchain-based traceability framework are also supporting longer-term sector stability. Pakistan’s cotton production remains under pressure from climate variability, pest infestations, poor seed quality and high input costs. Output is estimated at 1.15 million tonnes in 2025-26, down 4 per cent, and is projected to decline further to 1.10 million tonnes in 2026-27, increasing the country’s reliance on raw cotton imports. In the United States, planted area has been revised upwards by 5 per cent to 3.3 million hectares, lifting projected 2026-27 production to 2.9 million tonnes. Newly implemented US Section 301 tariffs of 10 per cent to 12.5 per cent are also reshaping global trade flows, with manufacturing hubs such as Vietnam potentially facing higher costs and buyers reassessing sourcing strategies.
Diversify India's import sources, fortify manufacturing: EY expert
Tuesday 1st Sep 2026, (Source: www.fibre2fashion.com/news)
Insights: India needs to diversify import sources while strengthening domestic manufacturing, according to D K Srivastava, chief policy advisor of EY India. As India's non-oil imports, which accounted for 77.6 per cent of merchandise imports in FY26, remain heavily concentrated in China, there is a need for both source diversification and a targeted import substitution strategy, he said.
India needs to diversify import sources while strengthening domestic manufacturing, according to D K Srivastava, chief policy advisor of EY India. Although the value of imports has expanded substantially over time, the import to gross domestic product (GDP) ratio has moderated from its historical peak, indicating a relative reduction in import dependence, Srivastava wrote in an opinion piece. At the same time, the trade surplus generated by services continues to mitigate India’s merchandise trade deficit, he noted. India's merchandise imports continue to exhibit a significant degree of commodity concentration, he wrote. As India’s non-oil imports, which accounted for 77.6 per cent of merchandise imports in fiscal 2025-26 (FY26), remain heavily concentrated in China, there is a need for both source diversification and a targeted import substitution strategy, Srivastava said. The Indian government has adopted a renewed import substitution strategy under the Aatmanirbhar Bharat framework. At the July 2026 Board of Trade meeting, import substitution was identified as a key priority to reduce import dependence, conserve foreign exchange, strengthen domestic supply chains and mitigate vulnerabilities arising from excessive reliance on foreign suppliers. It has prepared a joint strategy with state governments to substitute imports worth nearly $189 billion through domestic manufacturing of 1,272 products across sectors, Srivastava wrote. About 26 per cent of India's FY26 import basket has been assessed as amenable to import substitution. The strategy emphasises product-level interventions, supported by sector-specific manufacturing clusters, streamlined approvals and fiscal incentives. As many of India's high-growth export sectors continue to depend on imported components and industrial inputs, a distinction may, therefore, be made between resource-based imports like crude oil and gold, where domestic constraints limit substitution possibilities, and manufacturing-related imports like electronics, machinery, chemicals and specialised industrial inputs, where domestic production can be expanded, Srivastava said. Reducing dependence on electronic components, APIs for pharmaceuticals, critical minerals and advanced manufacturing inputs through greater investment, research and development, and domestic value addition should remain a policy priority, he added.
Brazil cotton body urges natural fibre focus in import debate
Tuesday 1st Sep 2026, (Source: www.fibre2fashion.com/news)
Insights: Abrapa is urging Brazil's Congress to weigh natural fibres, domestic textile competitiveness and synthetic-fibre impacts as MP 1,357/2026 nears a vote. The measure keeps a zero import duty on online foreign purchases up to $50; without approval in early September, the previous 20 per cent duty returns. A proposed CIDE-Têxtil would tax imported finished textiles by synthetic-fibre content.
Brazil’s cotton producer association is urging lawmakers to treat the final debate on the provisional measure known as MP das blusinhas as more than a tax issue, calling for Congress to consider the competitiveness of the domestic textile chain, environmental impacts linked to synthetic fibres and the value of natural fibres produced in the country.
For textile and apparel sourcing teams, the outcome affects the tax treatment of low-value online cross-border imports and could also shape whether imported finished textiles face a new sustainability-linked levy based on synthetic-fibre content.
The Brazilian Cotton Growers Association (Abrapa) said MP No. 1,357/2026, issued by Brazil’s federal government in May 2026, removes the 20 per cent Import Tax on international online purchases of up to $50. The measure must be approved by the Chamber of Deputies and the Senate in early September to remain valid; otherwise, Abrapa said, the current zero rate would lapse and the previous 20 per cent tax would return. Gustavo Piccoli, president, Brazilian Cotton Growers Association said, “We need to discuss which materials and production models we want to encourage. This is not just a tax discussion. It is a discussion about competitiveness, sustainability and the future of the Brazilian textile chain.” Abrapa said Brazil has the world’s fifth-largest textile industry and the largest complete and vertically integrated textile chain in the West, spanning raw-material production through to final product commercialisation. The sector accounts for more than 1.3 million direct jobs and generates indirect economic impact for more than 8 million Brazilian families, according to the association. The association said its position is not against imports or competition, but in favour of more balanced competitive conditions. Piccoli said, “While imported products can reach the Brazilian market benefiting from tax relief, those who produce, invest and generate jobs in the country remain subject to the national tax burden and to a set of rules, controls and regulatory requirements. We understand that this difference in conditions should also be part of the debate in Congress.” Within the MP No. 1,357/2026 debate, Abrapa said it supports discussion of Amendment No 52, authored by Senator Carlos Fávaro (PSD-MT), which proposes creating CIDE-Têxtil. The proposal would apply progressive taxation to imported finished textile products according to the share of synthetic fibres in their composition.
Under the proposal cited by Abrapa, products with up to 20 per cent synthetic fibres would face a 2 per cent rate; those with composition between 20 per cent and 50 per cent would face 5 per cent; between 50 per cent and 80 per cent would face 8 per cent; and products with more than 80 per cent synthetic fibres would face 10 per cent. Abrapa said the initiative seeks to use taxation as an economic instrument to encourage materials with lower environmental impact and strengthen natural fibres and the national production chain. The proposal also provides for revenue to be directed to actions related to sustainable agriculture, circular economy, ecodesign, innovation and development of lower-impact materials. Besides cotton, the proposal could benefit other natural-fibre chains produced in Brazil, including silk, linen, sisal and jute. The association said these chains contribute to regional bioeconomies, rural job generation and local development. Piccoli said the debate is an opportunity to bring sustainability, competitiveness and natural-fibre value into the same agenda. He said, “We are available to Parliament to clarify doubts, share technical information and contribute to a qualified dialogue on the sustainability of the textile chain. The Brazilian cotton sector has knowledge and experience to contribute to this debate.” Abrapa also cited its 2025/2026 Crop Report, which says Brazil is consolidating its position as a world leader in cotton exports, while the domestic market is seeing growth in imported products made with synthetic fibres. Piccoli said, “We are a world power in the production of a natural and renewable fibre, while we expand our dependence on imported synthetic fibres. It is a contradiction that needs to be part of this debate.” The association also raised environmental concerns around the growing use of petroleum-derived synthetic fibres such as polyester, nylon and acrylic. Abrapa said that during the use, washing and disposal of garments made with these materials, particles known as microplastics can reach the environment and water-supply systems. Abrapa cited scientific studies by the State University of Campinas (Unicamp) and The New England Journal of Medicine that have identified microplastics in the human body, broadening scientific concerns and debate about possible health effects. The association said it has also joined an awareness note on micro- and nanoplastics, which highlights the growing presence of these particles in daily life and stresses prevention, further scientific research and public policies to reduce population exposure. In this context, Abrapa said the MP No 1,357/2026 debate also creates room to discuss lower-impact alternatives and the value of natural fibres. According to the association, executive director Marcio Portocarrero said Abrapa wants to broaden the discussion beyond natural-fibre consumption to include the impacts of consumer choices on health and environmental sustainability. Portocarrero said, “Abrapa will continue contributing technically to Congress to broaden the debate on the impacts of synthetic fibres and the economic, social and environmental importance of valuing natural fibres.”
Yarn Prices Raise Tiruppur Knitwear Costs
Wednesday, 2nd Sep 2026, Yash Chouhan (Source: www.smartinfoindia.com)
Rising Yarn Prices Push Up Tiruppur Knitwear Production Costs by 15%
Tiruppur: The continuously rising prices of cotton yarn have raised concerns within Tiruppur's knitwear industry. According to exporters, knitwear production costs have increased by approximately 15% this year due to the steady rise in yarn prices. However, overseas buyers are unwilling to accept these higher prices, forcing exporters to absorb the additional costs themselves. On Tuesday, prices for various types of cotton yarn rose by up to ₹5 per kilogram, with some spinning mills hiking rates by as much as ₹7 per kilogram. Industry data indicates that since the beginning of the year, the price of certain yarn varieties has increased by more than ₹80 per kilogram. K.M. Subramanian, President of the Tiruppur Exporters Association, stated that rising cotton prices are the primary reason for the hike in yarn costs. He noted that the price of a 'candy' of cotton (356 kg) has risen from ₹58,000 at the start of the year to ₹74,000 now. He added that despite the Central Government temporarily waiving import duties on cotton from June to October, prices did not see the expected decline. S. Shanmugasundaram, President of SIHMA, stated that prices for some cotton yarn varieties have surged by up to ₹110 per kilogram this year. He urged the Centre to intervene immediately and regulate yarn exports. Industry bodies have warned that if the price surge continues, it could have an adverse impact on Tiruppur's knitwear sector and employment.
Karimnagar Cotton Faces Drought Stress
Wednesday, 2nd Sep 2026, Yash Chouhan (Source: www.smartinfoindia.com)
Drought Affects Cotton Crop in Karimnagar; Production Likely to Drop by Up to 50%
Karimnagar: The growth of the cotton crop in Karimnagar district is being hampered by a lack of rainfall and persistent drought conditions. Farmers fear that if adequate rain does not fall within the next ten days, yields could plummet by as much as 50 percent.
Anticipating low rainfall due to the El Niño effect, the state government and the Agriculture Department had urged farmers to avoid paddy cultivation this season and instead opt for Irrigated Dry (ID) crops. However, despite these appeals, paddy was cultivated on a large scale. Farmers with access to water sources cultivated paddy, while others grew cotton and other ID crops. This year, cotton has been sown across approximately 46,000 acres in the district. According to farmers, the lack of rain delayed cotton seed germination, and subsequent plant growth has also been stunted. Misala Lachaiah, a farmer from Vedira village in Ramadugu Mandal, stated that he sowed cotton in the second week of June, but germination did not occur until late July. He noted that under normal conditions, the plants' branches should have grown much longer by this stage. The stunted growth raises concerns that the number of flowers—and ultimately the yield—will be adversely affected. An infestation of leafhoppers has also been observed in Lachaiah's two-acre crop. Nugonda Mallesham, a farmer from Goliramayahpally, said that the next ten days are crucial for the crop. Dr. N. Venkateshwar Rao, Head and Senior Scientist at the Krishi Vigyan Kendra (KVK), Jammikunta, explained that plants are unable to absorb sufficient nutrients during drought conditions. Prolonged moisture stress can lead to reduced yields. Furthermore, weak plants are at a higher risk of pest attacks.
Maharashtra’s Yawal Faces Kharif Crisis as Crops Wither Without Rain
Wednesday, 2nd Sep 2026, Yash Chouhan (Source: www.smartinfoindia.com)
Crops in Dahigaon and surrounding areas of Maharashtra are at risk due to a month-long lack of rain. Efforts are underway to save cotton, soybean, and maize crops by providing water.
Maharashtra: The Kharif season has been completely threatened by the lack of significant rainfall in Dahigaon, the entire Yawal taluka, and surrounding areas for a month. The persistent drought-like conditions have left farmers worried, and soybean, urad, mung, maize, sorghum, and cotton crops are failing. Many farmers, distressed by the drying up of their crops, have uprooted their standing crops, while others have begun preparing for the next sowing season by using rotavators with tractors.The lack of significant rainfall over the past month has stunted crop growth. Horticultural farmers with access to irrigation have begun trying to save their cotton, soybean, and maize crops by watering them with wells and borewells. However, the Kharif crops of farmers with dry land are on the verge of being completely destroyed. In the Satpura foothills, the fields of Dahigaon, Sawkheda Sim, Haripura, and Mohrala have light soil and low water-holding capacity. Lack of rain has caused crops in these areas to wither. Many farmers have uprooted their standing crops of soybean, black gram, green gram, and rice.Farmers were already facing financial constraints due to expensive seeds, fertilizers, and increased labor costs. Farmers who were hoping for a profitable Kharif season have been disappointed. Poor and tribal farmers in this region are particularly in dire financial straits, having suffered significant losses due to the ruthless nature.
Karnataka Plans Two Textile Export Centers
Wednesday, 2nd Sep 2026, Yash Chouhan (Source: www.smartinfoindia.com)
Two Textile Export Centers Proposed in Karnataka, Focus on Global Marke
Bengaluru: The Karnataka government has proposed to establish two Textile Export Facilitation Centers to connect the state's handloom and textile sector with the global market. One of these centers is proposed to be located in North Karnataka and the other in Doddaballapur near Bengaluru. The state's Chief Secretary has submitted this proposal to the central government.
On Saturday, during the National Handloom Expo 2026 held in Bengaluru, Rohini Sindhuri, Secretary of the MSME, Mines and Textiles Department, stated that the proposed centers will help provide various export-related services on a single platform. She said that these centers will provide guidance on export procedures, documentation, international quality standards, global market opportunities, and connecting with foreign buyers. Sinduri said that Karnataka's handloom and textile products have great potential in the global market. However, to compete in the international market, not only product quality but also facilities like market intelligence, certification, documentation, and buyer linkages are essential. The proposed Export Facilitation Center will work towards meeting these needs in one place. The proposed center in North Karnataka is expected to provide export-related assistance to weavers, textile producers, and entrepreneurs in the region. The proposed center in Doddaballapur will focus on supporting the textile and garment industry in Bengaluru and surrounding areas. The state government is also emphasizing infrastructure development, adoption of new technologies, skill development, market linkages, and export promotion to increase textile exports in the coming years.
Focus on the Domestic Market
Meanwhile, the government is also planning to expand the domestic market for handloom products. Textile Development Commissioner and Director of the Handloom and Textiles Department, A.B. Basavaraju stated that the 14-day National Handloom Expo held in Bengaluru received a good response. He stated that plans are underway to organize larger handloom exhibitions and sales expos in Bidar and Devanahalli to reach more customers with handloom products. The government has identified Bengaluru Rural, Bengaluru Urban, Mysore, and Hassan as "Champion Districts." Ballari, Gadag, Haveri, and Bagalkot have been classified as "Aspirational Districts" under central government guidelines.According to Basavaraju, special training workshops are being organized for officials and entrepreneurs in these districts to educate them on export procedures and opportunities available in the global market.
Gujarat Monsoon Deficit Threatens Cotton
Wednesday, 2nd Sep 2026, Yash Chouhan (Source: www.smartinfoindia.com)
Gujarat’s Monsoon Divide Puts Kharif Cotton Crops at Risk
Gujarat’s uneven monsoon is emerging as a serious threat to kharif crops, with a sharp regional rainfall divide being masked by the state’s overall average. Data from the State Emergency Operation Centre shows that Gujarat has received 684.43 mm of rainfall, or 75.31% of its normal seasonal rainfall of 909 mm. However, heavy rains in South Gujarat are significantly lifting the state average. The region has received 1,597 mm, or 103.56% of its normal rainfall, while large parts of Saurashtra, Kutch and North Gujarat continue to face severe deficits. The extent of the shortfall is reflected in the national rainfall-deficit rankings, with 12 Gujarat districts featuring among India’s 25 most rain-deficient districts. Devbhumi Dwarka has recorded the country’s highest rainfall deficit at 93.59%, receiving just 6.41% of its normal rainfall. Porbandar ranks second with an 81.88% deficit, having received 18.12% of normal rainfall, while Jamnagar ranks third with a 71.12% deficit and 28.88% of normal rainfall. Kachchh ranks fourth nationally, with a 70.57% deficit and only 29.43% of normal rainfall. Other Gujarat districts in the top 25 include Aravalli, ranked 11th with a 53.77% deficit; Gir Somnath and Sabarkantha, both with deficits of 53.38%; and Rajkot, with a 52.89% deficit.Chhota Udepur has recorded a 49.26% deficit, Banaskantha 48.75%, Dahod 47.67% and Junagadh 44.36%. The prolonged moisture shortage is raising concerns over crop yields across the affected regions. Groundnut, a major kharif crop, is particularly vulnerable as it enters the pod-filling stage in Rajkot, Jamnagar, Junagadh and Gir Somnath. Cotton crops are at risk of flower and boll shedding, while castor and sesame are facing poor establishment and moisture stress in Kutch and North Gujarat. With more than 92% of kharif sowing already completed, the coming rainfall spell will be crucial. Timely and adequate rains could help ease moisture stress and protect crop yields, while a continued dry spell could further intensify the risk of production losses.
