Indian cotton prices are trading at an all-time high. It has been a very strong year for the cotton prices and the global markets are trading at a 10-year high as well.

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The cotton prices in India have gained 64 percent and the global prices are up by nearly 45 percent. Prices have surged because of lower production not just in India, but in various other major producer countries as well.

There are supply constraints from the top producers, there is also an ongoing supply chain constraint so the export numbers have continued to decline as well. There is rising demand from the textile industry and with the economy continuing to open, it has kept cotton prices on the higher side.

In the Indian markets, we are looking at around 356 million bales of production this time around, which is slightly lower than the previous year. There are concerns here, markets are dealing with attack on bollworm pests from one side and then there has been some surplus rain in other producing areas.

There are heat waves going on in UP right now that seem to be impacting the standing crop as well and there has been a smaller planting area for crops this time around as well.

Everything really seems to be adding up and the way cotton prices are trading at an all-time high right now, the markets believe that there is further strength to go on and before this year ends, another 8 to 10 percent of an increase in cotton prices is what the Street is working with.

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(Edited by : Dipikka Ghosh)