Cotton prices rise by Rs 4,500 per candy, putting Tamil Nadu under pressure

CHENNAI: Cotton prices have surged by Rs 4,500 per candy over the past 10 days, raising production costs for spinning mills and adding to the challenges faced by Tamil Nadu’s textile industry, which employs lakhs of workers.

According to a Daily Thanthi report, Tamil Nadu has around 2,000 spinning mills, of which nearly 1,000 operate in and around Coimbatore. These mills source cotton from northern states and overseas to meet their production requirements. However, rising and volatile cotton prices are putting pressure on the industry as the 2026-27 cotton marketing season gets underway.

A candy of cotton weighs 355.62 kg. Its price has increased from Rs 64,000 to Rs 68,500, marking a sharp rise at the beginning of the new season, which started in September.

Cotton price rise raises textile industry concerns

Nishant Asher, secretary of the Cotton Association, attributed the price increase to lower production, farmers holding back stocks in anticipation of better prices, and the proposed reintroduction of import duty from November 1.

According to the Southern India Mills’ Association (SIMA), domestic cotton consumption stood at 336 lakh bales in the 2025-26 season, which ended on September 30. Imports accounted for 67 lakh bales, while the closing stock was estimated at just 40 lakh bales.

Against an expected demand of 360 lakh bales, domestic production is projected to reach only 260 lakh bales in the current season. This supply-demand gap is likely to keep cotton prices firm, SIMA said.

The association noted that higher prices could benefit cotton farmers, but warned that the reintroduction of import duty would make it difficult for the textile industry to remain competitive.

Textile industry seeks permanent import duty exemption

Industry representatives have urged the Union government to make the exemption from cotton import duty permanent, pointing to declining domestic production and the growing dependence of textile mills on imported cotton.

Many domestic cotton farmers have shifted to other crops, contributing to the decline in production, they said.

With the textile sector supporting lakhs of workers and export demand remaining significant amid free trade agreements with overseas markets, industry representatives said the Centre must take a balanced approach that protects farmers while ensuring affordable raw materials for textile manufacturers.

They urged the government to take an early decision on cotton import duties and price stability to prevent further pressure on the textile sector.