Prices of cotton should fall by a minimum of seven to eight per cent to be competitive, which could only happen if there was fall in local physical prices and weakened rupee or both, Indian Cotton Federation President J Thulasidharan said on Tuesday.

If this was not happening, in reality export volume will get limited, and the firming of rupee was also likely to contribute to the adverse parity in Indian prices, he said.

Moreover, China was believed to hold 8.33 million tonnes (MT) of cotton in reserve as on date, which was against their normal annual consumption of 8.02 MT, he said in a statement.

This clearly indicated that Chinese imports were likely to be reduced substantially.

In spite of reduced imports, China was likely to carry forward substantially at the end of cotton year 2013-14 a stock of 12.61 MT, with a stock-to-use ratio of 150 per cent, which was going to be one of the major factors influencing the Indian Cotton Export, Thulasidharan said.