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While advising the textile mills against panicking over purported reports of tight cotton stock position during the current season, Indian Cotton Federation (ICF) has appealed to the traders against speculating on the production of cotton and increasing the price of the white fibre.
“During the last cotton season, the trade had projected a very tight closing stock, but in reality the stock was comfortable, which in turn helped in a downward correction of the price by ₹2,000- ₹46,500 during the end of season,” ICF President J Thulasidharan said.
Domestic price
“Domestic cotton price generally tend to rule higher than international price during the end of season, but in 2017-18 Indian cotton price continued to rule lower than the international price. During the current season too, the Indian cotton price is ruling 10 per cent lower than international price. The textile industry should have leveraged on this trend, gained competitive advantage in the global market,” he added.
He hoped that the cotton position would remain comfortable during the 2018-19 season as the minimum support price (MSP) is up 26 to 28 per cent, notwithstanding the favourable monsoon condition as well.
The Department of Agriculture, Cooperation and Farmers’ Welfare released the first advance estimate last week. As per this report, the area under cotton showed a marginal decline from 122.53 lakh hectares in December 2017 to 122.38 lakh hectares.
Advance estimate
The fourth advance estimate for 2017-18 cotton season had estimated the area at 124.29 lakh hectares. Industry sources expect this area to rise further this season as compared to the previous year.
“We are expecting cotton quality to be much better during 2018-19 compared to the earlier season in view of the efforts taken by the Cotton Corporation of India in enforcing quality parameters and ginning practices,” Thulasidharan said.
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