Indian raw cotton prices, particularly the Shankar-6 variety has crossed Rs 36,000 per bale (1 bale = 355 kg) for the first time in the last five months.
Shankar-6 cotton price trends have been oscillating in a fixed price band of between Rs 33,500 and Rs 35,000 per bale in the last six months.
The last time when Shankar-6 prices were quoting above Rs 36,000 level was on September 13, 2012. After a gap of more than six months, they once again crossed the mark to settle at Rs 36,125 per bale on February 20.
Prices have been steadily rising since February 7, when it stood at 34,200 per bale. After which it has steadily gained ground to touch Rs 36,125 per bale yesterday.
Mr Anand Popat – Secretary of the Saurashtra Ginners Association (SGA) says, “Arrivals have gone down, while export demand from major cotton buyers has gone up. At the same time, Northern India mills have also became aggressive buyers, since prices of Punjab J-34 cotton variety are higher than Shankar-6”.
A source from Coimbatore based Cotton Sourcing Company (COSCO) also vouches for the fact that lower arrivals and increase in demand has led to Shankar-6 prices shooting up.
He adds, “There is no cotton in the Gujarat ginneries. Farmers are holding on to cotton on expectations of higher prices, which has led to a mismatch in supply and demand and has led to a spike in Shankar-6 cotton prices in the last few days”.
Mr Popat also adds, “Major global cotton buying companies have also started stocking aggressively in recent days and alongside players in the Indian cotton futures market too have become aggressive”.
When asked to comment on future trends, Mr Popat informs, “Trends have become really difficult to predict, but taking the estimates of year-ending Indian stocks into consideration, cotton prices might go up in the near future”.
