Around 12 percent drop in rains and acreage that hit soon to be harvested crop have led to concerns over cotton supplies, making the fibre as much as 20 per cent costlier than at this time last year.

Raw cotton prices were in the range of Rs 5,400 per 100 kg, even as fresh crop has started arriving in the wholesale markets of Punjab and Haryana. Because of the firm prices, people are buying only as per their requirement, traders, ginner and millers said.

The prices are higher than anticipated as arrivals are slow. Major spinning companies from Trident to Vardhman have entered the market, buy buying as per their requirement.

The raw cotton prices are expected to ease to Rs 4,700-4,900 per 100 kg by December when arrivals will pick up across the country.

On Monday, the spot cotton lint (cotton without seed, accounting for roughly about a third of the weight of raw) price was Rs 21,970 per bale of 170 kg on the Multi Commodity Exchange of India.