Election fever in India’s largest cotton producing state Gujarat has hit arrivals this month. According to traders and brokers, arrival of the new crop has declined 35% compared to last year. At a time when the country is having good export demand, the short supply has pushed the cotton and kapas (raw cotton) prices by 4% and 7%, respectively, this month. As per the traders and brokers, cotton arrivals have reported 35,000-40,000 bales (a bale of 170 kg) per day which was about 60,000-65,000 bales in December 2016. Generally, new crop begins to arrive in the market in October but because of election in the state, arrival of cotton has been slower this year since the new season the start of new season. “Cotton arrival in the state has fallen by 35% this year due to election. Political activities in the rural and semi urban areas engaged the farmer community and as a result, supply has been affected. “Though, after election result, arrival will increase,” said Jatin Bhindora, a cotton broker from Rajkot.
Traders said China, Pakistan, Bangladesh and other countries are buying cotton from India heavily at this time. As supply is tight, cotton prices have gone up. Arun Dalal, an Ahmedabad-based cotton trader and exporter said, “India has booked about 1.3 million bales of cotton export contract and of it about 9 lakh bales have been exported so far. “There is good demand from neighbouring countries like China and Pakistan and this has pushed up kapas prices by 7% and cotton prices by 4% during December this year.”
Cotton was traded at about `37,500-38,000 per candy of 355 kg in the beginning of December and currently it is ruling at Rs 39,000-39,500 per candy. Similarly, kapas was traded at Rs 925-950 per 20 kg which is now quoted Rs 1,000-1,015 per 20 kg.
As per the latest report of Cotton Advisory Board (CAB), cotton production in India would be about 37.7 million bales for the year 2017-18 as against 34.5 million bales in 2016-17. The board has estimated 10.4 million bales cotton production in Gujarat for this year which was 9.5 million bales last year. Traders believe that the quality of new cotton was slightly dull this year due to adverse weather during sowing period and pest attack during growing stage.
However, this will not impact much in the coming days as production is higher than last year.