India has the world’s largest cotton area, and mills, ginners and traders use these futures to hedge prices. This guide covers the contract, the crop calendar and the risks to know before you trade.
Cotton in 30 seconds
MCX Cotton futures track ginned cotton, also called lint, priced per candy of 356 kg. Gujarat, Maharashtra and Telangana are the biggest growing states. India produces about 20% to 23% of the world’s cotton. It also has the largest cotton area, about 38% of global farmland under the crop. Spinning mills, ginners and traders use these futures to hedge price swings.
Contract snapshot
| Contract | Price quoted per | Tick size | Contract months | Expiry day | Settlement |
|---|---|---|---|---|---|
| Cotton (candy) | Candy of 356 kg | ₹20 per candy | November, January, March, May, July, September | Last day of the contract month | Compulsory delivery, with staggered delivery |
- Trading hours: 9:00 AM to 9:00 PM, Monday to Friday.
- Margin: at least 8% of contract value.
- Delivery window: the staggered delivery tender period starts 3 days before expiry. FYERS asks clients to close positions before it begins.
- History: MCX stopped new cotton contracts in 2022 after prices crossed ₹1,00,000 per candy. A revised contract started trading on 13 Feb 2023.
- Liquidity: very thin. On many days, few or no contracts trade, so check volume and open interest before placing an order.
What moves the cotton price
- The monsoon. Most cotton is rain-fed. Weak or patchy rain cuts yields and lifts prices.
- MSP and CCI buying. The Cotton Corporation of India (CCI) buys at the minimum support price when market prices fall. This puts a soft floor under prices.
- Global prices. ICE cotton futures in New York set the world benchmark. A large gap with Indian prices shifts exports and imports.
- Import duty. India charges about 11% duty on raw cotton imports. It was waived from 19 Aug to 31 Dec 2025 to help textile mills.
- Crop estimates. In May 2026, the Cotton Association of India (CAI) put the 2025-26 crop at 334 lakh bales of 170 kg. The government estimate was 292 lakh bales.
- Mill demand. Yarn and textile export orders decide how much cotton mills buy.
Crop calendar
| Stages | Months |
|---|---|
| Sowing in north India (Punjab, Haryana, Rajasthan) | April to May |
| Sowing in central and south India | June to July, with the monsoon |
| Picking | October to January |
| Peak arrivals in mandis | November to March |
| Cotton season (for crop data) | 1 October to 30 September |
Cotton price milestones
The table shows the Gujarat spot benchmark (Shankar-6), which MCX cotton tracks closely.
| Date | Shankar-6 spot price (₹ per candy) | What happened |
|---|---|---|
| May 2022 | above 1,00,000 | Record high after unseasonal rain, a global shortage and heavy speculation |
| November 2022 | about 66,000 | Prices cooled; MCX had stopped launching new cotton contracts |
| November 2023 | about 55,800 | Down about 15% in a year on weak mill demand |
| May 2026 | about 67,100 | Up about 25% in two months as Iran-US tensions lifted commodities |
| 8 Sep 2026 | about 68,800 to 69,300 | New-season arrivals began; MSP raised by ₹557 per quintal for the coming season |
How to read it
- Compare with ICE cotton. If Indian prices rise while ICE is flat, local factors such as crop damage or CCI buying are at work.
- Watch MSP levels. When spot kapas trades near MSP, CCI buying usually limits further falls.
- Track CAI and government estimates. A cut in the crop estimate often lifts prices within days.
Risks to know
- Very low liquidity: wide bid-ask spreads mean you may not exit at a fair price.
- Compulsory delivery: open positions in the tender period can lead to delivery of physical cotton.
- Policy shocks: duty changes, export curbs or trading halts can move prices sharply. Trading stopped once before, in 2022.
- Leverage: with a margin of about 8%, losses can exceed what you put in.
Quick FAQs
What is a candy? A traditional Indian trade unit for ginned cotton, equal to 356 kg.
Can I hold a cotton contract till expiry? Only if you can give or take delivery. The staggered delivery period starts 3 days before expiry, so exit or roll over before then.
Do I need a separate account to trade cotton futures? No, but you need the commodity segment activated. In the FYERS app, go to Profile, then Segments, activate Commodity, upload income proof (such as your latest ITR, 6 months’ bank statement or 3 months’ salary slips) and e-sign with Aadhaar OTP.