Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
ET Markets
11,419.25-177.65
Stock Analysis, IPO, Mutual Funds, Bonds & More

Cotton rises in sync with New York futures rate

The spot cotton prices of Gujarat 29 mm fibre length cotton increased by 2.7 per cent in a week.

, ET Bureau|
May 29, 2019, 11.18 AM IST
0Comments
Getty Images
cotton-getty
Pasha Patel said, “We have recommended a 15 per cent increase in cotton MSP for 2019-20.”

Commodity Summary
MCX

COTTON
Pune: Indian cotton prices jumped by close to 3 per cent in a week, driven by the rise in New York cotton future prices and lower availability of cotton in the market, and if the government announces any rise in minimum support price (MSP) for the ensuing kharif crop, it is also likely to drive cotton prices further.

The spot cotton prices of Gujarat 29 mm fibre length cotton increased by 2.7 per cent in a week – between May 20 and May 27 -- from Rs 44,400 per candy of 356 kg each to Rs 45,600/candy.

Pasha Patel, chairman, Maharashtra Commission of Agricultural Cost and Prices, said, “We have recommended a 15 per cent increase in cotton MSP for 2019-20.”

A Vidarbha broker, who didn’t want to be identified, said, “We expect the government to increase the MSP by at least 10 per cent. Cotton prices can rise further if the MSP goes up.”

Traders and ginners try to hold on to their cotton stocks in May as a weight loss of 2-3 per cent can result in a loss of about Rs 800/candy to Rs 950/candy at current rates. As cotton absorbs moisture, increasing its weight, traders like to wait till the onset of monsoon to liquidate their stocks “Ginners are not selling cotton to avoid losses caused by reduction in weight of cotton due to moisture loss during a hot May," said J Thulasidharan, president of the Indian Cotton Federation (ICF).

Though Cotton Association of India, which largely represents traders, has pegged India’s cotton production at 315 lakh bales of 170 kg each, ICF has pegged India’s cotton production at 345 lakh bales. As domestic prices have been rising, millers from south India have resorted to importing cotton. As the cost of transporting cotton from Maharashtra to Tamil Nadu is higher than the cost of transporting it from Tuticorin port, they are able to get imported cotton cheaper by about Rs 1,500/candy at mill gate.

Any hike in MSP to be announced by the central govt for the ensuing kharif crop is also expected to drive the cotton prices upward
0Comments

Also Read

Farmers’ groups split over HTbt cotton cultivation

Global slump crimps cotton yarn exports

Rising cotton prices to shrink operating margins of cotton yarn spinners, says CRISIL

'Falling overseas-domestic price gap to boost cotton imports'

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for Live Elections News & Results, Latest News in Business, Share Market & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service