Raw Cotton

India is the second largest producer, consumer as well as exporter of Cotton in the world. This makes Cotton prices very vulnerable to changes in global demand and supply. 

Indian exchanges have a highly liquid Kapas contracts on NCDEX, and cotton contract on MCX is in making. Active derivatives in this segment will allow Indian physical traders to actively do price risk management. 

Yields that are one of the lowest in world are rapidly increasing. This will help India maintain its position as one of the top producers as well as exporters. On the other hand Indian economy remains one of the high growing economies and the fact that Cotton is largely used by the affluent class will help the domestic demand for the commodity grow at healthy pace. 

Cotton globally is an important investment commodity and has equally large potential to be the one in India.