Agri Business

Cotton body sees a stable situation on higher stocks

LN Revathy Coimbatore | Updated on April 26, 2018

 

After reviewing the crop situation for the 2017-18 cotton year, the Indian Cotton Federation (ICF) believes that the situation is “more stable than expected.”

“Cotton farmers were expecting better prices earlier. The arrivals were late, so we thought that the crop was less. But with arrivals at 90,000 bales a day at market yards, we expect the market to be stable,” said J Thulasidharan, President, ICF.

 

Prices did shoot up by ₹1,000, reacting to the New York market moves, but it has now started to show a downward trend. “Those that had invested in cotton are expecting ₹45,000 per bale (of 170 kg each). When it rains, the market tends to move up, as there is a weight gain of 3-4 per cent. But during the month of May, sellers are generally reluctant to sell. Incidentally, after many years, the stock with the trade has peaked,” he told BusinessLine.

Price outlook

Is it a good sign? “Of course, for it is with the trade. Further, as compared to international prices, the Indian cotton price is low and reasonable.”

When asked if the present situation would augur well with the cotton farmer as his realisation is not on expected lines, the ICF President said, “there is a global surplus. There are no takers for Indian cotton as the fibre from India is not standardised.”

Due to tight financial situation prevailing in the spinning sector and comfortable availability of quality cotton, the prices are expected to remain steady. “The monsoon would be a major deciding factor for cotton prices for the period between June and October 2018.”

Yarn situation

While the industry is expecting a steady cotton market, the yarn market, though steady, is learnt to be slow. “Mills are not carrying huge stock of yarn as the payments are delayed in the aftermath of GST. Textile scenario till the yarn sector looks steady,” Thulasidharan said, adding “but there is threat of imports from Bangladesh and Pakistan. This could play spoilsport if the government does not intervene and insist on the “Certificate of Origin” in the interest of the domestic sector.

Published on April 26, 2018

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