Cotlook Index: 27-07-2026
89.10 (-1.25)
CAI Launches Farmer Support Initiative to Boost Cotton Productivity and Quality
Wed. 29th July 2026, Jayesh Chouhan (Source: www.smartinfoindia.com)
CAI Launches Major Farmer Support Initiative; Focus on Higher Cotton Productivity and Better Quality.
Dondaicha (Dhule), 28 July 2026: The Cotton Association of India (CAI) has launched a new initiative to promote scientific cotton cultivation and improve productivity and quality across India's cotton-growing regions. Speaking at the Farmers' Training Programme in Dondaicha, CAI President Shri Vinay N. Kotak announced the continuation of CAI's pheromone trap distribution programme, which has been helping cotton farmers control pest attacks for the past eight years. CAI also introduced the CAI Farmers Mobile Krishi School, an initiative led by former Agriculture Commissioner Dr. S. K. Mayee, under which agricultural scientists will visit farming regions to provide practical training and modern cultivation techniques directly to farmers. Shri Kotak said Maharashtra has the largest cotton cultivation area in India but significant scope to improve productivity through scientific farming. He emphasized that better yields and higher-quality cotton will benefit farmers while strengthening the entire cotton value chain, including ginners, traders, brokers, spinning mills, and the textile industry. The programme marks CAI's first organized farmer training initiative, with plans to expand it across Maharashtra. The association reaffirmed its commitment to supporting every stakeholder in the cotton sector and helping farmers become more productive, profitable, and self-reliant.
ICE cotton declines after 5-day rally due to falling crude oil
Wed. 29th July 2026, (Source: www.fibre2fashion.com/news)
Insights: ICE cotton futures paused their five-session rally, with the December 2026 contract settling at 80.53 cents per pound amid profit booking, weaker crude oil and cautious buying. However, rising open interest, declining certified stocks and China's seventh consecutive fully subscribed reserve auction signalled firm underlying demand. Prices remained above key moving averages and the 80-cent support.
ICE cotton futures paused a five-day rally yesterday. Although, US cotton declined slightly but it showed consolidation rather than reversing trend. The market was dragged down due to falling crude oil, sluggish export demand, and cautious buying. The most active December 2026 contract settled at 80.53 cents down 0.35 cents. However, the contract recorded gains of 55 points over the last two sessions. It was a sign of consolidation rather than reversing lower. Most contracts recorded slightly higher highs and hither lows than Monday before late-session trimmed gains, reflecting profit booking rather than aggressive liquidation. Trading volume totalled 34,619 contracts, compared with 38,785 contracts Monday, below the July average of 45,959 contracts, but still well above the July 2025 average of 28,810 contracts, indicating seasonal summer trading while participation continues to improve. Open Interest increased 124 contracts to 325,006, continuing the recovery from 300,216 contracts on June 26, with nearly 25,000 new contracts added over the past month, indicating that fresh money continues to flow into the market. China's State Reserve Auction recorded its 7th consecutive 100 per cent sellout, with 8,006 tonnes sold. The 7-day cumulative total reached 56,137 tonnes, consisting of 55 per cent US cotton, 22 per cent Brazilian cotton and 23 per cent Xinjiang cotton, confirming continued strong demand for US cotton. China's domestic mills continue purchasing every available lot, reinforcing the bullish story of tightening nearby supplies and supporting the premium for deliverable cotton.
ICE Certified Stocks declined another 3,536 bales to 90,699 bales, the lowest level in nearly six months, further strengthening the tight deliverable supply outlook.
From a technical perspective, December futures remained above the 10-day moving average for the second consecutive session and above the 20, 40, 50, 100 and 200-day moving averages for the sixth straight session, confirming the longer-term uptrend remains intact despite short-term consolidation. Cotton also held above the important 80 cent psychological level and above the 80.35 cent midpoint of the recent trading range for the second consecutive day, indicating buyers continue defending key support. Meanwhile, crude oil fell $3.35 to $79.26 per barrel, extending its three-day decline to $12.90, as easing Middle East tensions reduced the geopolitical risk premium, creating a headwind for commodity markets. Grain markets were mixed, with corn higher in 7 of the last 8 sessions, soybeans higher in 6 of the last 8 sessions, while wheat posted its first gain in four sessions as improving Corn Belt weather tempered weather concerns.
US equities remained firm, with the Dow Jones gaining 537 points, the S&P 500 rising 15.6 points, while the Nasdaq slipped 55 points, reflecting continued risk appetite in broader financial markets. Precious metals weakened, with gold down 0.9 per cent and silver down 2 per cent, while the US Dollar Index fell 0.2 per cent to 101.379, providing a modest supportive influence for cotton exports. Markets also remained cautious ahead of the Federal Reserve's policy decision, with no rate change expected, and traders focused on Chair Powell's comments for guidance on future monetary policy. This morning (Indian Standard Time), ICE cotton for December 2026 was traded at 80.45 cents per pound (down 0.08 cent), cash cotton at 75.46 cents (down 0.13 cent), the October 2026 at 78.89 cents (down 0.32 cent), the March 2027 contract at 81.99 cents (down 0.12 cent), the May 2027 contract at 83.12 cents (down 0.12 cent), and the July 2027 contract at 82.84 cents (down 0.32 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.
China Cotton Reserve Sales May Boost Demand for U.S. Cotton Exports
Wed. 29th July 2026, Jayesh Chouhan (Source: www.smartinfoindia.com)
China’s Cotton Reserve Sales May Open Door for Higher U.S. Exports
China has started releasing cotton from its government reserves, including U.S.-origin cotton that has remained in storage for several years. According to Cotton Incorporated economist Jon Devine, the move could pave the way for China to return to the global market to rebuild its reserves, creating fresh export opportunities for U.S. cotton producers. Devine says China’s cotton reserve system, often referred to as its "cotton bank," has remained largely inactive in recent years. However, reserve sales began this week, with a significant volume of U.S. cotton being offered. He says if the reserve stocks continue to decline, China may need to replenish its inventories in the coming months, potentially boosting demand for U.S. cotton. Meanwhile, the U.S. Department of Agriculture reports that China continues to be an active buyer of American cotton. During the past week, China purchased 15,500 bales of U.S. cotton, while total upland cotton exports for the current marketing year remain ahead of last year's pace.
Cotton Sowing Accelerates as Monsoon Strengthens, Acreage Crosses 100 Lakh Hectares
Wed. 29th July 2026, Jayesh Chouhan (Source: www.smartinfoindia.com)
Cotton Sowing Picks Up Pace as Monsoon Intensifies; Acreage Crosses 100 Lakh Hectares. Cotton sowing has accelerated across the country's major cotton-producing states following the intensification of the monsoon. So far this season, the cotton acreage has surpassed 100 lakh hectares. Telangana, Madhya Pradesh, and Andhra Pradesh have recorded an increase in the area under cultivation compared to last year. Experts believe that if the rainfall continues, the total acreage could even exceed last year's levels. According to Atul Ganatra, Chairman of the Crop Committee of the Cotton Association of India (CAI), cotton sowing has gained significant momentum despite a 20–30 day delay in the monsoon's arrival. Recent good rainfall has provided farmers in low-rainfall regions with the opportunity to sow the crop. He noted that the sowing window has been extended to August 25 this year, and it is possible to achieve the government's target of 120 lakh hectares by August 20. Currently, cotton is being sown across approximately 50,000 hectares daily. In terms of individual states, cotton acreage has increased by 31 percent in Andhra Pradesh and 4 percent in Telangana. The area under cultivation in Madhya Pradesh has reached 5.79 lakh hectares. In Gujarat, cotton acreage is expected to rise by 7 to 10 percent this year, driven by recent rains and a subsidy of ₹14,000 per acre announced by the state government. However, cotton acreage in Maharashtra has remained slightly lower compared to the previous year. According to the CAI, the condition of the cotton crop across the country is currently satisfactory. Arrivals of the early-sown crop from North India and parts of South India are expected to begin in the first week of September. Crops in several regions, including Raichur in Karnataka and Adoni in Andhra Pradesh, have benefited from the recent rainfall. Meanwhile, in the Khandesh region of Maharashtra, crops in irrigated areas are in good condition; however, the cotton acreage there could decline by 5 to 10 percent as some farmers shift towards maize.
Maharashtra Weather Update: Red Alert in Vidarbha, Schools Closed in Nagpur, Gadchiroli and Chandrapur
Wed. 29th July 2026, Jayesh Chouhan (Source: www.smartinfoindia.com)
Strong Return of Rain in the State: Orange Alert for Vidarbha, Yellow Alert for the Rest of Maharashtra; Schools Closed in Nagpur and Gadchiroli.
Maharashtra Weather Update: Rainfall intensity has increased across Maharashtra due to the formation of a low-pressure area over the Bay of Bengal. The India Meteorological Department (IMD) has issued a 'Red Alert' for heavy to very heavy rainfall in three districts of Vidarbha—Chandrapur, Gadchiroli, and Gondia. Considering rain-related risks and student safety, a holiday has been declared for all schools, colleges, Anganwadis, and coaching classes in Nagpur, Gadchiroli, and Chandrapur districts on July 29.
Likelihood of Heavy Rain Across the State from July 29 to 31
According to the weather department's forecast, moderate to heavy rainfall is expected between July 29 and July 31 in Vidarbha, North Marathwada, Khandesh, Konkan, and the Ghat regions of Central Maharashtra. The heaviest rainfall is predicted for Eastern Vidarbha today. Meanwhile, heavy rain is forecast for Western Vidarbha, Khandesh, North Marathwada, Konkan, Thane, Palghar, and Raigad on Thursday. Rainfall intensity is expected to persist in the Mumbai Metropolitan Region, Khandesh, and Ghat areas on Friday.
Current Alert Status for Vidarbha
Red Alert: Chandrapur, Gadchiroli, Gondia
Orange Alert: Nagpur, Wardha, Bhandara
Yellow Alert: All other districts of Vidarbha
Holiday Declared by Administration
Following the IMD's 'Red Alert' for July 29, Chandrapur District Collector Vasumana Pant has declared a one-day holiday for all schools, colleges, Anganwadis, and private coaching classes in the district. As a safety measure, Gadchiroli District Collector Avishyant Panda has ordered the closure of schools, colleges, Ashramshalas (residential schools for tribal students), ITIs, and vocational training institutes in the district on July 29. Similarly, all educational institutions in Nagpur district will remain closed due to heavy rainfall. The heavy rain poses a significant risk of waterlogging in low-lying areas, flooding in rivers and streams, landslides, and traffic disruptions.
According to the Meteorological Department's forecast, moderate to very heavy rainfall is expected across various parts of the state today, July 29. A 'Red Alert' has been issued for the Chandrapur, Gadchiroli, and Gondia districts of Eastern Vidarbha, as these areas are likely to bear the brunt of the rainfall. An 'Orange Alert' has been issued for the Nagpur, Wardha, and Bhandara districts, while a 'Yellow Alert' is in place for the rest of Vidarbha. Additionally, moderate to heavy rainfall is predicted for the Konkan region, Northern Marathwada, Khandesh, and the Ghat areas of Central Maharashtra. Meanwhile, the intensity of rainfall is likely to be somewhat lower in Southern Marathwada and the southern parts of Central Maharashtra.
Cotton Prices Volatile as China Reserve Sales and Xinjiang Heat Shape Market Outlook
Wed. 29th July 2026, Jayesh Chouhan (Source: www.smartinfoindia.com)
Price Fluctuations in Cotton Market Driven by Reserve Sales and Weather Conditions
Beijing: The cotton market witnessed volatility last week amidst concerns regarding rising supply and production outlooks. Sales from government cotton reserves improved domestic availability, while persistently high temperatures in Xinjiang exerted pressure on the potential yield of the new cotton crop.
According to SunSirs, the domestic spot price for 3128B grade lint cotton stood at 17,658 RMB/tonne as of July 27, marking a 0.70% increase compared to the previous week.
Strong Response to Reserve Sales
Sales from the government cotton reserve began on July 20. During the first week (July 20–24), a total of 40,100 tonnes of cotton were offered for sale, and the entire volume was sold, resulting in a 100% sales rate.
The average transaction price was 17,405 RMB/tonne, equivalent to approximately 18,004 RMB/tonne on a 3128 grade basis. The high premiums achieved in the auction signaled strong buying interest from textile companies.
The average transaction price for Xinjiang cotton was 16,994 RMB/tonne, while the average price for imported cotton was recorded at 17,516 RMB/tonne.
*Hot Weather Pressures New Crop
Temperatures in key cotton-producing regions of Xinjiang remained significantly above normal over the past two weeks, while rainfall was below average. Extreme heat led to issues such as the shedding of flowers and cotton bolls in some areas, raising concerns about the new crop's yield. According to the Ministry of Agriculture and Rural Affairs' analysis in July, the cotton production forecast for the 2026/27 season has been revised down to 6.34 million tonnes. Meanwhile, the estimated yield per *mu has been lowered to 147 kilograms. Weak Demand in the Textile Sector
The downstream textile industry is currently going through the traditional off-season. Mill purchasing activity remains sluggish due to weak orders and limited demand. Last week, the operating rate of textile mills in key regions stood at 72.0%. Yarn inventory levels have risen to an average of 20–30 days. Many small and medium-sized mills are restricting purchases to immediate requirements due to cash flow constraints.
Market Outlook: Sales from government cotton reserves have temporarily eased supply pressure and limited the likelihood of a sharp rise in prices. However, a potential recovery in demand during the upcoming peak season and high premiums realized in reserve auctions could provide price support.
Going forward, the trajectory of cotton prices will depend on weather conditions, the actual yield of the new crop, and demand from the textile industry.
US Senate bill puts India at risk of 100% tariffs over Russian oil
Wed. 29th July 2026, (Source: www.fibre2fashion.com/news)
Insights: US senators voted 86-12 to advance a Russia sanctions bill that could allow tariffs of up to 100 per cent on goods from major buyers of Russian oil and gas. India, China, Slovakia, Hungary and Azerbaijan are among countries exposed if the measure becomes law. Exporters and sourcing teams face policy uncertainty as further Senate votes and House action remain pending.
The US Senate has moved forward a bipartisan Russia sanctions bill that could expose goods from India and other major buyers of Russian energy to tariffs of up to 100 per cent if the measure becomes law and President Donald Trump uses the proposed authority. The tariff provision would apply to imports from countries that continue purchasing significant volumes of Russian oil and gas. India, China, Slovakia, Hungary and Azerbaijan are listed among the countries that could be affected, creating a potential trade-policy risk for exporters, importers and sourcing teams dealing with US-bound merchandise. The US Senate voted 86-12 yesterday in a procedural vote to begin consideration of the bill. The vote clears an initial hurdle, but further Senate procedures and a final vote are still required.
India is particularly exposed because it is the world's second-largest buyer of Russian crude after China. According to the Centre for Research on Energy and Clean Air, India's Russian crude imports rose 34 per cent in June 2026 to a record level. The imports were valued at €4.5 billion (~$5.3 billion) and represented about 36 per cent of Russia's crude oil export revenues.
The bill was introduced in April 2025 by the late Senator Lindsey Graham.
No ITC if supplier fails to deposit GST; SC upholds Guj HC ruling
Wed. 29th July 2026, (Source: www.fibre2fashion.com/news)
Insights: India's Supreme Court upheld the constitutional validity of Section 16(2)(c) of the CGST Act, ruling that businesses cannot claim Input Tax Credit unless suppliers deposit GST with the government. The verdict reinforces statutory conditions for ITC, increases responsibility on companies to verify supplier tax compliance and strengthens the legal framework governing GST credit claims.
India's Supreme Court has upheld the constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax (CGST) Act, ruling that businesses cannot claim Input Tax Credit (ITC) unless their suppliers have deposited the corresponding GST with the government. The verdict reinforces the statutory conditions governing ITC claims and is expected to have significant implications for corporate tax compliance and supply chain due diligence.
The judgment came in Bhandari Scrap Traders versus Union of India & Others, in which the apex court dismissed Special Leave Petitions challenging a Gujarat High Court ruling in Maruti Enterprise versus Union of India & Others. The petitioners had argued that they should not be denied ITC for genuine transactions merely because suppliers failed to remit GST, a factor beyond the buyers' control.
The Supreme Court agreed with the Gujarat High Court's interpretation that Section 16(2)(c) is neither unconstitutional nor liable to be read down. It held that the GST framework differs materially from the erstwhile Delhi VAT regime, under which courts had extended protection to bona fide purchasers in similar circumstances.
The court observed that the CGST Act provides a statutory mechanism under Section 41(2), read with Rule 37A, allowing recipients to re-avail reversed ITC once the supplier subsequently discharges the tax liability. It also noted the relevance of Sections 73 and 74 governing tax recovery and enforcement.
The ruling rejected reliance on earlier Delhi VAT judgments, including On Quest Merchandising India, Arise India and Shanti Kiran India, as well as the Tripura High Court's decision in Sahil Enterprises, holding that the GST framework operates under a different legislative scheme.
The judgment places greater responsibility on businesses to monitor supplier tax compliance before availing ITC. Companies may need to strengthen vendor due diligence, reconcile GST returns more rigorously and closely track supplier tax payments to minimise the risk of credit reversals.
The decision provides legal certainty on one of the GST regime's most litigated provisions by affirming that ITC remains a statutory concession subject to fulfilment of all conditions prescribed under the CGST Act, including actual payment of tax by the supplier.
India's IIP for textiles up 13.7% YoY in June 2026; 6.9% drop for RMG
Wed. 29th July 2026, (Source: www.fibre2fashion.com/news)
Insights: India's index of industrial production (IIP) for textiles manufacturing in June rose by 13.7 per cent to 136.4, while the same for readymade garments dropped by 6.9 per cent YoY to 95.6, according to quick official estimates.
The IIP for leather and related products manufacturing in the month fell by 7.4 per cent YoY to 107.5. The overall IIP growth rate in the month was 7.3 per cent YoY.
India’s Index of Industrial Production (IIP) for textiles manufacturing in June this year rose by 13.7 per cent to 136.4, while the same for readymade garments dropped by 6.9 per cent year on year (YoY) to 95.6, according to quick estimates released by the National Statistics Office (NSO).
The IIP for leather and related products manufacturing in the month fell by 7.4 per cent YoY to 107.5.
The overall IIP growth rate in the month was 7.3 per cent YoY. The quick estimate of IIP stands at 123.1 in June against 114.7 in the same month last year.
The index for manufacturing stood at 123.3—a 7.8-per cent YoY growth, while within the sector, 19 out of 23 industry groups recorded a positive YoY growth.
The indices stood at 119.5 for primary goods, 140.5 for capital goods and 124.2 for intermediate goods in June, while those for consumer durables and consumer non-durables stood at 119.8 and 115.4 respectively.
The IIP growth rate in the second quarter (Q2) this year was 5.8 per cent YoY, with the quick estimate standing at 121.3.
The IIP for textiles in the quarter rose by 14.3 per cent to 136.3, while the same for readymade garments dropped by 7.4 per cent YoY to 93.8, an NSO release said.
The IIP for leather and related products manufacturing in the quarter increased by 0.3 per cent YoY to 103.1.
