Cotton prices which have been shooting up with each passing month, since the beginning of the current cotton season, will witness a further rise in prices in the next few months, more so due to the supply and demand mismatch in global markets and also due to global recovery in demand for finished textiles and apparel goods.
At present, prices of Indian cotton are ruling at a lower price than those prevailing in global markets of cotton of comparable quality. Price of Shankar-6, a much-sought-after variety in India, is quoting at 83.5 cents per pound, while globally; equivalent varieties are selling at 94.5 cents per pound.
The main reason for this ambiguity is that the Indian government cancelled fresh registrations of cotton export contracts in the previous month, which led to a crash in prices of the white gold, much to the delight of the textile value-added sector.
However, even before the ban on cotton exports, overseas buyers were lining up on India's shores, since quotes of cotton grown domestically was lower than international prices, so much so that India replaced the US, as the biggest exporter of cotton to China.
According to a cotton expert, the prices in the global market will continue to move up due to a shortage in supply and despite an increase in acreage of cotton cultivation in India, the yield is a bit lower this year, due to abnormal delay in monsoon.
Fibre2fashion News Desk - India