Slower arrivals of kapas due to heavy rains in the last few weeks across the country have helped the cotton prices increase abruptly. The current daily arrivals are about 70,000 bales. About 3.25 crore bales have arrived in the markets till now.
The unsold stock lying with the Cotton Corporation of India amounts to 81 lakh bales after sale of 4.5 lakh bales by e-auctions. The unsold stocks lying with ginners all over India is about 22 lakh bales, said Indian Cotton Federation (ICF).
Maharashtra State Marketing Federation has plans to offer over five lakh bales for sale and also may open display counter shortly at Coimbatore. The cotton stock lying with mills in the country is approximately 40 lakh bales.
The increase in cotton prices abruptly is attributed to heavy rains and hailstorms along with an abrupt increase in Cotlook A index to 73 cents per lbs, which has given stability to the prices at higher rates in India as foreign cotton prices too went up at around the same time.
In this situation it has become viable for exporters to procure cotton as they have been silent for quite some time. As per reports, export demand for cotton is stagnant for the time being.
According to the ICF, as the acreage has touched around 130 million hectares, any increase in yield per hectare will boost the volume of cotton crop to a considerable level and also farmers average income will get a boost. Since the demand for cotton continues to be moderate and arrivals slowed down, lack of export demand, the volatility needs a watch. Monsoon for next season is predicted to be below normal, still farmers’ decision is unknown.
In northern region of Punjab, Haryana and Rajasthan, the kapas arrivals are dropping drastically as the season is coming to an end and the unforeseen hailstorm and rains in the last fortnight have had an effect on the kapas arrivals. The price for good quality J-34 r/g in Punjab stood at R3,675 per maund spot while in Haryana it was priced at R3,590 per maund spot. In Rajasthan it stood at R3,570 per maund spot.
Nearly 90 lakh bales of cotton has been pressed in Gujarat till now. The repeated rains and hailstorms in many parts of Saurashtra has had an effect on the kapas arrivals in the last fortnight. This has led to the market shooting up to nearly R34,800 spot per candy abruptly as the mills both from north and south have been actively buying to secure good quality before the season comes to a close.