After international prices hit a record high in 2011, cotton trended downwards. This year, the agriculture ministry has set output of Indian cotton at 33.4 million bales, the Cotton Association of India at not less than 35million bales and the US Department of Agriculture (USDA) at 32.5 million bales. All these estimates are less than the record output of 2011-12. Yet, with lower demand, the Cotton Association of India estimates a 15-million-bale surplus and USDA has set Indian exports to dip 60 per cent. In the last quarter of the year, prices rose marginally as the minimum support price was hiked 18-29 per cent. With Australian and American crops expected to drop a slow prices led to decline in acreage, traders are expecting some firming of global prices this year. Much depends, of course, on Chinese demand and supply as the year progresses. Though cotton arrivals are subdued so far in mandis, prices are unlikely to spiral upwards in the next few months IPM data till the week ending January 5, 2013. 

The Indicus Price Monitor (IPM), a product of Indicus Analytics Pvt Ltd, tracks realtime wholesale prices for 62 agricultural products from about 3,000 mandis. Due to differences in methodology, the IPM levels differ from the corresponding wholesale price index (WPI). However, broad trends are in sync.