The Hindu Business Line : Cotton continues to rise

PRICES of major cotton varieties in the domestic market have increased sharply by Rs 1,000/1,500 per candy (355.56 kg) during the current month, due to good demand from local cotton mills and exporters despite good arrivals of new cotton.

The major varieties include Bengal Desi, J-34, Shanker-4, Kalyan, Bunny-Brahma, LRA, MECH, MCU-5 and DCH. Reports say major buyers are Gokak, Vardhman, Nahar, South mills and local cooperatives.

"Exports and local buying are quite restrained but prices are going out of hand despite good arrivals. Sellers have become very wary and are not inclined to sell at the moment. All the major varieties are being quoted much higher," a leading broker said.

Some orders have reportedly been booked by Pakistan to import 1,50,000 bales (170 kg) of cotton (V-797, Shanker and MCU-5).

"Average daily arrivals of cotton in the country have currently gone up to 75,000 bales from 67,000 bales last weekend," a local dealer said. Sixty per cent of the total crop has been marketed.

"Next week, we may see much faster rate of price increase in the market. Only sobering element is that prices of certain foreign cottons can now compete with Shanker and Brahma cottons. But for all other varieties there is hardly any competition," another broker said.

"Cotton prices are expected to go up by another Rs 1,000/1,200 per candy in the next few days as demand for export from Pakistan are good," he said.

"The market trend is definitely firm right now," Mr Mitesh Shah of Kanam Cottons, a Gujarat-based broking firm said.

"Buying from all over has kept the market firm. Also, the arrivals were slowing during and post Makar Shankranti at a low of 10,000 bales per day in Gujarat and a high of 21000 bales per day yesterday. Local mills are covering good amounts of all qualities at rising levels now," Mr Shah said.