India’s cotton prices rose by 2-3 per cent in the last one week. November is considered as peak arrival month, however traders and spinning mills are clueless about market direction as the accuracy of cotton arrival estimates is debatable. Traders said that buyers are waiting for arrival, but farmers will bring the crop to the market after Gujarat elections.
Cotton prices reached ₹6,450-6,500 per maund of 37.2 kg in Punjab, ₹6,400-6,500 per maund in Haryana and ₹6,650-6,700 per maund in upper Rajasthan. The prices come up to ₹64,100 per candy of 356 kg. Cotton was sold at ₹63,500-65,000 per candy of 356 kg in lower Rajasthan. In Gujarat’s Morbi region, cotton was quoted as high as ₹67,000 per candy.
Cotton prices increased by 2-3 per cent since last week. It is alarming for the textile industry to see higher prices during November when cotton arrival reaches its peak. But this year, the scenario is different as cotton arrival is yet to pick up. North India’s cotton arrival was estimated at 19,000 bales of 170 kg. However, all India arrival has become a point of debate. Some traders estimate that cotton arrival reached one lakh bales. But the other traders are of the opinion that the estimate was incorrect.
A prominent trader from Gujarat’s Morbi region Chetan Bhojani told Fibre2Fashion, “Cotton arrival was not more than 50 per cent of what was estimated during the same period of last year. Gujarat’s arrival was estimated at 35,000 bales but it will not be more than 20,000 bales. Morbi region received not more that 2,000-2,500 bales of cotton on Tuesday.”
Traders and spinners are clueless about the market price direction. Cotton prices are rising because of low arrival. ICE cotton was also supportive for domestic prices. ICE cotton December 2022 contract was at 88.39 cents per pound. It was traded around 1 per cent higher than the previous session. ICE cotton gained around 4-5 per cent in the last couple of days. Apart from lower arrival and stronger ICE cotton, some other factors also helped push the natural fibre’s prices upwards.
Trade sources said that MNCs are ready to buy and may begin procurement in mid-November. Spinners are also taking an interest as they must accumulate stock for the entire season. There are speculations that Cotton Corporation of India may also procure ginned cotton from the open market for price stabilisation. Although, it cannot buy seed cotton (Narma) from farmers as it is ruling at more than 5 per cent than the MSP of ₹6,080-6,380 per quintal. Seed cotton is traded at around ₹8,500-9,000 per quintal in various regions of the country.
“Lower arrival was mainly responsible for higher prices. Farmers have seen seed cotton prices over ₹10,000 per quintal so they are not satisfied with the current prices,” a trader from Bathinda mandi told Fibre2Fashion. There was consensus among traders about the reason behind higher prices. Bhojani also feels that farmers expect higher prices, which is why they are delaying their crop. However, they will bring the crop when prices ease down. This is unique a season because prices are usually higher during the peak season. It may come down in off-peak season.
Some traders are of the opinion that Gujarat state elections are also an important aspect for cotton prices and farmers will bring the crop to the market after the elections that are to be held in the first week of December.