ICE’s most active December 2025 contract settled at 66.90 cents per pound (0.453 kg), down 0.35 cent or 0.52 per cent. The contract has lost a total of 78 points over the last two sessions. Other contracts also closed lower, with losses ranging from 19 to 67 points.

ICE cotton futures declined as a stronger dollar and weak grain markets pressured prices.
December 2025 contract settled at 66.90 cents per pound.
USDA export sales rose 44 per cent weekly but missed expectations, and shipments were poor.
USDA’s September WASDE report left cotton forecasts unchanged.
US equities hit record highs, while crude oil and soybean prices added further downside pressure.

Trading volume was 36,204 contracts, compared with 38,237 in the previous session. ICE deliverable No. 2 cotton contract stocks remained unchanged at 15,474 bags as of September 17.

The US dollar rose 0.6 per cent, marking its second consecutive higher close, though it remains near 3.5-year lows. A stronger dollar makes dollar-denominated commodities such as cotton more expensive for buyers using other currencies. Crude oil futures declined by $0.59 on the day of the Fed decision, adding further pressure on cotton prices.

The Federal Reserve announced a 25-basis-point rate cut, which had been widely anticipated.

USDA’s weekly export sales report for the week ending September 11 showed a net increase of 186,100 bales—44 per cent higher than the prior week and 13 per cent above the 4-week average.

CBOT soybean futures fell for the second consecutive day, weighed down by weaker soyoil prices. Soyoil futures also dropped for the second session, pressured by the US EPA’s unclear proposal on redistributing biofuel blending obligations under the small refinery exemption programme. Market analysts said grain market weakness and a strong dollar are weighing on cotton. While USDA’s export sales report was ‘decent’, it fell short of export targets and shipments were poor, signalling that export demand remains lacklustre despite some increase in sales.

USDA’s September World Agricultural Supply and Demand Estimates (WASDE) report kept forecasts unchanged for US cotton consumption, exports, and 2025-26 year-end stocks.

US equities moved higher, with all three major indices hitting new all-time highs both intraday and at close.

Currently, ICE cotton for December 2025 is trading at 66.83 cents per pound (down 0.07 cent), cash cotton at 64.90 cents (down 0.35 cent), the October 2025 contract at 65.50 cents (up 0.31 cent), the March 2026 contract at 68.74 cents (down 0.10 cent), the May 2026 contract at 70.14 cents (down 0.03 cent) and the July 2026 contract at 71.03 cents (down 0.05 cent). A few contracts remained at their previous closing levels, with no trading recorded today.

Fibre2Fashion News Desk (KUL)

The 56th meeting of the GST Council held recently has culminated in a landmark restructuring of India’s indirect tax regime, with far-reaching implications across key sectors.

The earlier five-tier GST structure—comprising 0 per cent, 5 per cent, 12 per cent, 18 per cent, and 28 per cent slabs—has been replaced by a more streamlined framework featuring just two principal rates of 5 per cent and 18 per cent, supplemented by a new “sin and luxury” rate of 40 per cent for a narrow band of goods.

The revised GST rates are scheduled to take effect from September 22.

For the apparel and textile sector, the council has fixed a uniform 5 per cent GST rate on readymade garments and made ups, excluding items under HS codes 63053200, 63053300, and 6309.

In a significant rationalisation, the GST on manmade fibres has been slashed from 18 per cent to 5 per cent, while yarns have been brought down from 12 per cent to 5 per cent. This alignment effectively corrects the long-standing inverted duty structure (IDS) across the MMF value chain—fibre, yarn, and fabric—removing a key distortion that had undermined manufacturing competitiveness and locked up working capital.

Given that a substantial portion of MMF production takes place in the MSME segment, the rate cuts are expected to alleviate cost burdens, enhance liquidity, and improve cash flow efficiency.

More importantly, the move bolsters the global price competitiveness of Indian MMF-based garments, reinforcing the country’s strategic objective of becoming a dominant hub for synthetic textiles and MMF-based apparel.

The timing of the GST overhaul is particularly crucial, offering timely relief to an industry reeling from the impact of US President Donald Trump’s steep 50 per cent tariff on Indian goods.

While the Government has maintained that the GST reform has been in the works for over a year and is not a reactionary policy move to US tariffs, the revised GST structure is nonetheless seen as a much-needed support mechanism for export-oriented industries navigating severe external shocks.

Industry stakeholders largely welcomed the reform, viewing it as a long-overdue rationalisation of what many felt was an irrational tax structure.

S.K. Sundararaman, Chairman of the Southern India Mills Association (SIMA), reportedly noted that the prior tax regime—where MMF inputs were taxed higher than outputs—effectively made affordable clothing more expensive for end consumers. The rectification is expected not only to enhance affordability but also to reduce import dependency by promoting domestic value addition.

Rakesh Mehra, Chairman of the Confederation of Indian Textile Industry, echoed similar sentiments, emphasising that the alignment of tax rates across the MMF value chain is a critical step toward resolving longstanding working capital constraints faced by thousands of spinners and weavers.

Mehra reportedly also pointed out that over 70 per cent to 80 per cent of the textile and apparel ecosystem is comprised of MSMEs, many of which operate on tight margins and limited cash reserves. For them, any measure that eases input cost burdens and streamlines refunds has a direct bearing on operational viability and market competitiveness.

Some concerns have, however, emerged centring on the move to impose an 18 per cent GST on garments priced above ₹2,500.

The Clothing Manufacturers Association of India (CMAI), while fully endorsing the revised GST rate structure and commending the Government for accepting two key industry demands—the elimination of the inverted duty structure by applying a uniform 5 per cent  GST across the entire value chain from fibre onward, and the adoption of a fibre-neutral approach by aligning MMF and cotton fibre chains—has urged the GST Council to address one anomaly: the imposition of 18 per cent GST on garments priced above ₹2,500.

CMAI stressed that this higher tax rate undermines affordability and creates an unnecessary burden on consumers, despite the broader positive intent of the reform.

The Retailers Association of India (RAI), while supportive of the move towards a simpler dual-rate GST system, also flagged the structural shortcomings of price-based tax slabs. The RAI has recommended the adoption of a uniform GST rate across product categories, cautioning that the 18 per cent GST on apparel items priced above ₹2,500 could distort consumer behaviour and suppress demand in key segments of the fashion retail market.

Some industry insiders also believe that the differential tax treatment based on price bands may inadvertently fuel the growth of the grey market, leading to an uptick in counterfeit and substandard goods as consumers seek cheaper alternatives.

Others have highlighted that apparel brands and retailers typically operate on razor-thin margins and may have no option but to pass on the higher tax burden to the consumers.

In such a scenario, the anticipated growth in domestic fashion retail could be impacted.

Notwithstanding the apprehensions, the on-ground impact of the new GST structure will become more apparent in the quarters following its implementation, most stakeholders felt, while underlining that with any policy overhaul of this magnitude, one cannot completely rule out transitional friction.

However, the broader consensus within the industry suggests that the benefits, particularly in terms of ease of doing business and improved cost efficiencies, might very well outweigh the short-term disruptions, if any.

The 56th GST Council meeting introduced a simplified regime, collapsing the earlier five-rate system into two primary slabs.
A uniform 5 per cent GST has been fixed for most garments and manmade fibres/yarns.
Some trade bodies have raised concerns over the 18 per cent GST on garments above ₹2,500; the majority, however, feel the reform will boost competitiveness and sectoral growth.

Fibre2Fashion News Desk (DR)