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Indian cotton market to remain upbeat

08
Feb '12
The prices of cotton have increased by around 10-15 percent in the Indian markets during the past few days and the price of Shankar 6 variety has risen to about 37,000-37,100 per candy of 356 kg.

There are several factors that indicate that the cotton market will remain upbeat in the coming days, especially due to the demand coming from China.

Mr. Anand Popat, Secretary, Saurashtra Cotton Ginners Association, told fibre2fashion, “There are three factors that indicate that the Indian cotton market will remain upbeat in the coming days. First, the Chinese Government has already purchased 14.8 million bales of cotton and kept it as reserve stock. Secondly, USDA's report anticipates sowing for the next season to remain lower. Moreover, the world cotton consumption has also increased compared to last year.”

However, Mr. Popat opines that the impact of the cotton stock with the Chinese Government is the main factor. He says, “The entire balance sheet of world cotton market shows that most of the holding stock is currently lying with the Chinese Government as reserve stock. At present, the Chinese Government is undecided about selling the stock and hence, the cotton rates will remain firm.”

“If the Chinese Government continues its buying for its reserve stocks, then the rates will go on increasing, if not the market will remain steady. On the other hand, if the Government releases its stocks for sale in the market then it will negatively impact the market. So currently, China plays a key role,” he explains.

Mentioning the demand from China for Indian cotton, he says, “Actually, the stocks lying with the Chinese Government are not for sale. In such a situation, the textile mills in China are looking towards India to get the cheapest cotton for running their industries. This has led to a continuous demand from China for Indian cotton.”

Fibre2fashion News Desk - India


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