Cotton prices may stay firm with enquiries from China

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AHMEDABAD: Cotton prices are expected to remain firm with enquiries coming from China. Prices have increased by 10% in the past few days to a range between Rs 36,500 and Rs 37,000 for a candy of 356 kg for the Shankar 6 variety. On the National Commodity and Derivatives Exchange, the April contract gained by 3.6% to Rs 888 for 20 kg.

“Cotton prices will remain firm and might see upward and downward movement by 2-5%. Even as international prices fell, Indian prices remained firm owing to a stronger rupee,” said Cotton Association of India, vice president Nayan C Mirani.

He said good quality cotton with a micronaire value of 3.5 to 4.9 would fetch better prices compared to cotton with lower micronaire value. Micronaire value defines the fineness of cotton and its suitability for spinning high-count yarn. “This year, quality is a major problem and very stark compared to the previous years. Initially, the problem was limited to Maharashtra but has now been seen across Madhya Pradesh and Gujarat,” he said. The low micronaire cotton would sell at a discount of 8-10% to quality cotton.

Ginners and traders in Gujarat said farmers were bringing cotton to mandis at a measured pace. “Farmers have the holding capcity and have become wiser in the past one year and they know what to sell when,” said Saurashtra Ginners Association secretary Anand Popat.

The strengthening of the rupee against the dollar has, however, hit Indian exporters. “There are sporadic enquiries from China .They are looking at signing contracts in the range of 95 to 96 cents a pound whereas our Far-east price is a dollar a pound,” said Mirani.

Source: http://economictimes.indiatimes.com/markets/commodities/cotton-prices-may-stay-firm-with-enquiries-from-china/articleshow/11772081.cms

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