As per NCDEX Knowledge Management Department Economist, Kavita Chacko, since the beginning of the year, amidst different varieties of cotton, the prices have increased by 15-30 percent, owing to restricted supplies and high demand.
In June, cotton prices reach new heights, practically its peak, owing to active buying by mills and firm demands by yarn producers in Asian nations. The net dearth in the raw material supply, clubbed with increased buying, especially from China, resulted in the practical market prices of cotton move ahead, informed Chacko.
During June 2010, the price of Shankar-6 variety of cotton ruled about Rs 29,500 per candy (356 kg) in the market. Local prices were maintained by fresh demand for exports, post government withdrawing the ban on exports, averred Chacko.
Again in June, cotton prices rose to record highs, mainly on the back of restricted supplies and increased demand. This ascending price trend was supported by the increase in demand for the raw material from China.
Now the government is intending to fix the volume of cotton exports from the country per year, announcing in advance the quantity available for exports and for local use.
However, monsoon failed to meet farmer's expectations in June and sowing in many parts of northern zones was affected. But the recent upward trend in monsoons, which has covered most of the nation, has boosted the prospects for cotton sowing.
More so, as the Directorate of Cotton Development, June 2010 end witnessed a 19 percent rise in cotton acreage on a year-on-year basis. The area for cotton cultivation stood a little more than 2.6 million hectares.
For the current season, a number of agencies have been predicting a steep rise in Indian cotton production, with farmers shifting to cotton, due to better crop earnings. These agencies have predicted local production of cotton, for the year 2010-11 to cross 30 million bales.
Fibre2Fashion News Desk - India