High carry forward China stocks impact Indian cotton price

Shankar-6 cotton prices which were quoting at around Rs 38,125 per candy (1 candy = 355 kg) on August 23 are now offered at Rs 34,500 per candy, down a massive 9.5 percent in just one month.

“There is a 50 percent power cut in Tamil Nadu since the last 40 days, which has impacted off-take of cotton”, Mr Arun Dalal, an Ahmedabad – India based cotton expert told fibre2fashion.

He added, “It has also been reported that the carry forward stock in China is 61 percent more than in the previous season. The rains though late, have also improved prospects of a good crop in most Indian cotton growing states”.

He further informed, “Thirdly, there are expectations of a bumper crop in most cotton regions of the world. Fourthly, the rupee has started appreciating against the US dollar, which in turn has reduced realizations for cotton yarn exporters”.

“All these factors together have combined to the fall in prices. I foresee a further drop of around Rs 500-600 per candy. However, I am optimistic that raw cotton prices will regain lost ground in the near future”, he wound up by saying.

Click here to read and view cotton trends from September 1. 

Fibre2fashion News Desk - India