In the global market, Indian prices are 10-15 per cent higher than the US,
Brazil and Pakistan.
Cotton futures have fallen 6-7 per cent because of weak domestic and export
demand, particularly from main buyers China, Bangladesh and Vietnam,
traders said.
“This year, compared to the previous years, fewer contracts are being signed
by multinational companies, domestic millers and traders from ginners. The
prices being quoted for October delivery for Madhya Pradesh and
Maharashtra cotton is Rs 39,500 per candy (356 kg), down from the current
spot price level of Rs 41,500,” said Dhiren Sheth, a director at cotton trading
company CA Galiakotwala.
Sheth said domestic mills were buying less, as they expect markets to remain
weak. In the global market, Indian prices are 10-15 per cent higher than the
US, Brazil and Pakistan, he added.
MNCs like Louis Dreyfus, Reinhart and Glencore were bidding for new
season cotton at Rs 39,500-39,800 per candy, or 6-7 per cent lower than the
current prices, said ginners.
“Indian exporters are apprehensive of buying even at this rate on the fear of
weak demand due to US-China trade war and the global economic
slowdown,” said Cotton association of India director Manish Daga.
He said prices were weighed also by huge stocks as state-run Cotton
Corporation of India was holding 8-9 lakh bales (170 kg each) and mills and
ginners were having 35 lakh bales.
Traders said there was some buying by mills like Vardhman, Trident and
Nahar.
“No mill is taking a call on long-term purchase. Buying is less by 50 per cent
this year compared to last year. Mills are just signing contracts to meet their
monthly requirement as they expect volatility in the market to continue,”
said Vinay Laddha of Vikas Traders at Madhya Pradesh’s Badwani district. Rains and the overall weather in the next one month will be crucial for the
crop, which will be harvested by October, he added.
Source: The Economic Times, India Saturday, 14 September 2019