PUNE: Cotton prices are likely to remain range bound till the monsoon sets in. Traders, exporters and ginners expect a gradual but limited rise in prices during the second half of the cotton year. Indian investors had turned away from the commodity last year.
According to the agriculture ministry, domestic prices have been lower than overseas prices since October 2014.
“As per the traders’ estimate, 45 lakh bales are still in the hands of traders and ginners. We expect prices to go up by maximum 10% till September 2016,” said a senior executive of a multinational export house, requesting not to be named. “However, the trend can reverse if the monsoon is good,” he said.
Pradeep Jain, a ginner from north Maharashtra said, “Cotton prices will remain rangebound in the next three months.” Major domestic mandis in India saw an increase in prices in January compared to that a year ago, but since then prices have remained stable. “After March, prices may go up slightly due to domestic consumption.
Millers are now not doing covering till October, preferring to live hand to mouth,” said BS Rajpal, managing director of Manjeet Cotton. “However the rise will be limited because the demand for cotton cloth has reduced, while there is no supply shortage,” he said. India’s total cotton exports declined 48% in 2014-15 over that in 2013-14, as per the data with the agriculture ministry.