Indian cotton prices rebound on increased demand

05 Jul '12

2 min read

Cotton prices in Indian markets are on a rise owing to increased demand from spinners and textile mills.

On July 4, the benchmark Shankar 6 variety of cotton was trading in Gujarat at Rs. 34,500 per candy of 356 kg each. In the northern states of Punjab and Haryana, the price was quoted at around Rs. 33,500 per kg, while it was in the range of Rs. 35,000-35,300 in south India.

“The prices of cotton have increased by Rs. 2,000-2,500 per candy during the last fortnight,” informed Mr. Paresh Valia of Asha Cotton Industries to fibre2fashion.

“The rise in prices of cotton is due to increased buying, which is mainly due to three reasons. First, is the delay in onset of monsoon, because of which new cotton would arrive only in November, i.e. after about five months from now,” he says.

“Most of the textile mills do not have enough cotton stocks to last for another five months. While large textile mills have some covering, other mills have cotton stocks enough to last for only 10-15 days,” he reasons.

“Secondly, there is an increase in the prices of yarn and the textile mills have enough orders in hand. This is driving the demand as well as prices of cotton,” he avers.

“Another reason is the expected 10-12 percent drop in cotton production during the coming season. It is because some farmers are likely to shift from cultivating cotton to other crops such as soya, groundnut and castor, as they are currently getting good returns on these commodities, and their prices do not fluctuate a lot like cotton,” he explains.

Fibre2fashion News Desk - India

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