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Cotton arrivals not gaining any impetus in market
09
Dec '10
Cotton arrivals are not gaining any impetus since the farmers are not releasing cotton from their stocks in anticipation of further rise in cotton prices.

Overall cotton arrivals throughout the country remained at 7 million bales (1 bale = 170 kg) between 1st October and 5th December as against the 7.2 million bales of cotton, from a year ago.

The cotton arrivals in Gujarat, which is one of the major cotton markets of India, have witnessed a drop of 15 percent and registered an arrival of 2.3 million bales. Maharashtra, another major cotton market, has also witnessed low cotton arrival. Madhya Pradesh and Andhra Pradesh are the two states which have recorded slightly better cotton arrivals, this time.

Most of the cotton traders are of the view that untimely rains that had currently affected different parts of the country are responsible for low cotton arrivals as well as damage of cotton crops. Farmers are anticipating better returns for their produce as they are well aware of the prospects that could lead to hike in prices in the future and that is the reason why they are not releasing their cotton stocks.

Cotton growers of India are likely to harvest a record high cotton yield of 32.5 million bales as against 29.5 million bales produced during the previous year. It is, indeed, shocking that in spite of the good harvests, this year, cotton arrivals are low.

Majority of the farmers have acquired the money which they had spent on cotton production as cotton prices have nearly increased twice this year and that is the reason why they are still holding their stocks. Cotton prices are likely to rise further as exporters are gearing up to dispatch their consignments before the deadline set on 15th December.

The government has already set a ceiling on exports of cotton and it has been restricted to 5.5 million bales for the current cropping year and has fixed a deadline of 15th December to dispatch all the shipments.

Indian cotton exporters will be in a position to export 3-3.5 million bales as domestic prices of cotton have registered sharp hike from last year's prices, thereby making it extremely challenging for the exporters to obtain cotton.

Shankar 6, which is the most well known variety of cotton, has posted a record high price of Rs 45, 500 per candy (1 candy=356 kg). Last year, the same variety of cotton had registered much lower price which was at Rs 32,200 per candy.

Fibre2fashion News Desk - India

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