In the last few days, the prices of cotton have risen in India owing to demand in both the export and domestic markets. Lower arrivals due to delay in monsoon and insufficient inventory with ginning mills have also contributed to increase in the price of cotton.
The price of Shankar-6 variety of cotton has shot up to around Rs. 40,000 a candy of 356 kg from around Rs. 38,000 a candy a month earlier. The prices of H-4 and LRA varieties of cotton, too, have increased by more than Rs. 1,000 a candy.
“With the factories going operational once again, there is demand for cotton in the export market as well as in the domestic spinning market and the cotton rates have increased by about Rs. 100-150 per quintal,” Mr. Anand Popat, Secretary, Saurashtra Ginners Association told Fibre2fashion.
Explaining the supply situation in the market, Mr. Popat said, “The arrival of cotton is low as compared to the number of spinning factories that have become operational. Hence, the farmers are of the opinion that the rates should increase as it occurred last year. Due to this, they are selling their crop intermittently. Moreover, this time the season itself is delayed by about a month and the cotton arrivals are not expected before the mid-November.”
In terms of demand, Mr. Popat informed, “Major export demand is from China. In the domestic market, the demand is from the southern region, especially Tamil Nadu, as the spinning units in that region have become operational.”
Mr. MP Patel, Chairman of Jaydeep Cotton Fibres Pvt. Ltd. added, “The far-eastern countries, where there are spinning mills, are the major export market for India. India exports to Pakistan, Bangladesh, Indonesia, China, Vietnam, Taiwan, etc. Some of these countries produce cotton that is not enough for their domestic consumption, while some others have no cotton production at all.”
Mr. Patel said the current rise in prices has not much benefited the farmers and ginners as the international market has come down considerably.
About future market outlook, Mr. Popat expects the market to see a downward trend once the cotton arrival starts around mid-November. He concedes that there is demand in the international market but the rates are on the lower side. “The bumper crop this year will also lead to a decrease in the price of cotton”, he believes.