Cotton prices in India's Gujarat rise 9% in first 3 weeks of January

Subsequently, however, cotton prices saw a downward trend and were traded at ₹75,000-75,500 per candy on January 22, according to Fibre2Fashion’s market analysis tool TexPro. This decrease was mainly due to the downward trend in ICE Cotton. ICE cotton futures edged lower further on Friday. ICE Cotton contract March 2022 declined to 120.75 cents, down 212 points; May 2022 closed at 117.98 cents, down 169 points; December 2022 closed at 98.85 cents, down 16 points.

On a year-on-year basis, the price of Shankar-6 has risen sharply by 65 per cent from around ₹45,500-46,000 per candy in January 2021.

Currently, cotton of V797 variety is being quoted at ₹46,500-47,000 per candy. Seed cotton (Kapas) is sold between ₹8,000-10,000 per quintal in Gujarat.

According to the December estimate of the Cotton Association of India (CAI), Gujarat is likely to produce 92 lakh bales of cotton this year, a little more than 91.5 lakh bales produced last year. Cotton sowing in the state stood at 22.53 lakh hectare in the kharif season 2021-22 as against 22.78 lakh hectare in the previous season. Pan-India, the CAI estimates cotton production to be around 348 lakh bales for the cotton marketing season that began on October 1, 2021.

Ramesh Patel, a trader from Gondal Agricultural Produce Market Committee (APMC), told Fibre2Fashion that cotton prices have skyrocketed in Gujarat this month due to lower than previously estimated production. In its November estimate, the CAI said it expects Gujarat’s cotton crop to be 97 lakh bales for the current season.

Lower arrivals at the mandis of Rajkot, Gondal and Jamnagar, and robust demand for cotton and cotton yarn from overseas also contributed to the increase in cotton prices, taking them to an all-time high level this month. Ginning and Spinning mills also purchased aggressively as they did not have much stock from the previous season.

According to Chetan Bhojani, a cotton exporter from Morbi (Gujarat), no fresh cotton export has been booked in the first 15-20 days of January, but exporters are engaged for shipments against their previous orders which were booked between US cents 103-115 per pound (₹60,600-67,700 per candy of 356 kg).

The record cotton prices are not likely to witness a sharp decrease in near future, according to traders. “Though the Indian cotton became costlier in global market, cotton yarn is very much in demand in global market, which can push the prices of Indian cotton upside again,” a trader told Fibre2Fashion.

Fibre2Fashion News Desk (KUL)