Cotton arrivals this season, which started this month, have started picking up with nearly 40,000 bales coming to the market every day in the country. Though this has brought down the cotton prices, the demand from textile mills has not increased.

Tamil Nadu has the largest number of textile mills in the country and cotton is the main raw material for these units.

K.N. Viswanathan, vice-president of the Indian Cotton Federation, said that the association had earlier estimated cotton production this season (October 2013 to September 2014) to be 370 lakh bales. Feed back from the cotton growing areas indicate that it could be higher. The rains do not seem to have affected the crop, though there is a delay in arrivals. Instead, it is expected to have increased yield. The association is likely to discuss the cotton estimates in a couple of days.

Cotton arrivals will jump after Deepavali. The prices now are roughly Rs. 43,500 to Rs. 44,000 a candy. For the November delivery, the price quoted is Rs. 42,000 a candy. However, purchase by textile mills is low. The mills need to pay the bonus now and they need financial resources for that. Further, they expect the cotton prices to decline from the existing level, he said.

The Cotton Association of India (CAI) has made a revised estimate for the cotton season and expects the production to be 381 lakh bales this year. The association expects nearly 113 lakh bales in Gujarat.