Cotton prices seen surging beyond record highs

20 Aug '10

2 min read

The Government of India's move to permit exports of cotton since October 1, besides quashing the export duty of Rs. 2,500 per ton on raw materials, is seen to maintain the prices firm in near future.

Even with prices at their all time high, exporters still have started placing their orders, with no reduction in the demand the world over.

Generally, as the supply of kharif crops to the market picks up, the prices start lowering, but it is not necessary this may happen in the new season.

Exporters apprehend the prices which already are at a record high to accelerate further and thus, have started placing their orders for cotton in the forward markets, for delivery after two months.

While, the global demand is likely to be on higher side than production, and Pakistan too is seen to suffer crop loss on account of floods, demand from China, the biggest cotton importer from India is also rising.

Prices which now are at their historic highs, were expected to decline in the month of December- January as and when new cotton crop enters the market, but now as cotton exports have been permitted, this expectation has reversed.

Regardless of the fact that the Shankar-6, the standard cotton variety of Gujarat has touched a record price of Rs 32,000 per candy (1 candy = 365 kg), the exporters have then started placing their orders in the forward market.

It is believed that, Pakistan for 2010-11 fiscal, would suffer a production loss of two million cotton bales (1 Pakistani bale = 170 kg).

Fibre2fashion News Desk - India

More Textiles News - India...