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War Fuels Cotton Demand as MMF Prices Soar
20 Mar
Summary
- MMF prices rose 10-25% due to crude oil price hikes.
- Cotton consumption projection increased by 10 lakh bales.
- Indian cotton yarn demand is up from China, Bangladesh, Vietnam.
Man-made fiber prices, including polyester, have surged by 10-25% in response to rising crude oil costs driven by the conflict in West Asia. This volatility is prompting mills to consider returning to natural fibers like cotton. The Cotton Association of India has consequently revised its cotton consumption forecast upward by 10 lakh bales for the 2025-26 season, which concludes in September.
International cotton prices have also firmed, with futures on ICE rising significantly. The weakening rupee further contributes to the costliness of imported cotton. In response, the Cotton Corporation of India (CCI) has increased its selling prices by ₹1,400 per candy.
Additionally, disruptions in global supply chains due to the ongoing war have led to increased demand for Indian cotton yarn from major importers such as China, Bangladesh, and Vietnam. Despite CCI raising prices, daily sales remain robust as mills fulfill immediate needs amidst market uncertainty.
Historically, cotton has faced growing competition from MMF, with its global market share in fiber consumption dropping below 25% from nearly 40% in the early 2000s. The current market dynamics, however, present a potential shift back towards natural fibers.
