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Cotton prices increased by Rs 200-300 for a candy of 356 kg on Friday as mills and exporters purchased heavily. Moreover, due to a holiday, arrivals dropped.
A grade Gujarat Sankar-6 cotton traded higher by Rs 200-300 to Rs 34,200-34,300 for a candy and B grade cotton at Rs 34,100-34,200 in Gujarat.
V 797 cotton was offered at Rs 26,000-26,500.
About 40,000 bales cotton arrived in Gujarat.
Arrivals declined due to holiday of Eid. Mills and exporters bought around 27,000 bales from Gujarat. New 29 MM (3.8+ micronaire) cotton traded at Rs 33,700-33,800, 29 MM (3.7+ micronaire) cotton traded Rs 33,500-33,600 in Maharashtra.
A Rajkot-based cotton broker said, “Mills and exporters have started to buying cotton from Gujarat in the last few days. Price may increase further as market will remain closed for the next two days due to the Republic Day holiday and Sunday.”
India Ratings expects domestic cotton prices to stabilise at the current low levels or decline by 5-10 per cent.
The current global cotton inventory is at a multi-decade high, with stocks to usage ratio estimated to be at 71 per cent (source: USDA).
Around 50 per cent of this global inventory is in China.
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