Commodities

Cotton surges on buying by S. India mills

Our Correspondent Rajkot | Updated on January 10, 2011

BL11_COM2_COTTON

Cotton prices rose on Monday following demand from mills in South India and indications of a hike in the cotton exports quota.

Prices increased Rs 500 to Rs 42,800-43,200 for a candy (356 kg). According to market sources, South Indian mills are buying heavily before the holiday this week.

Gujarat Sankar-6 variety cotton was traded at Rs 42,800-43,200 a candy in Rajkot. Cotton arrivals have come down during the past few days.

In Gujarat, about 60,000-65,000 bales arrived on Monday, compared over than 75,000 bales a week ago. Similarly, total arrivals of cotton reached 1.88 lakh bales, against 2.1 lakh bales in last week. Raw cotton was traded at Rs 920-960/20 kg.

A Rajkot-based broker said, “This week, cotton prices may increase by more than Rs 400-500 a candy, as arrivals are low and demand high. Mills are buying as market will be closed for some days for the Makar Sankranti festival.”

A bullish sentiment has set in cotton following the Union Commerce Secretary,

Dr Rahul Khullar's statement that the Centre could consider increasing the export quota from the 55 lakh bales allowed in October.

Mr Khullar told reporters in New Delhi that the 329 lakh bales production estimated by the Cotton Advisory Board was at the lower-end and it could higher around 340 lakh bales.

A decision on raising quota is likely to be made this week.

Pressure from Pakistan and reports that India has offered cotton to the neighbouring country in return for onion are seen as factors that could drive the natural fibre up further.

In Andhra Pradesh, prices ruled firm despite higher arrivals. At Adilabad, the rates were Rs 4,300 a quintal, while elsewhere they hit Rs 4,500.

Published on January 10, 2011

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