In the global market, Indian prices are 10-15 per cent higher than the US, Brazil and Pakistan.
By Madhvi Sally | ET Bureau|
Sep 12, 2019,
New Delhi: Cotton futures have fallen 6-7 per cent because of weak domestic and export demand, particularly from main buyers China, Bangladesh and Vietnam, traders said. “This year, compared to the previous years, fewer contracts are being signed by multinational companies, domestic millers and traders from ginners.
The prices being quoted for October delivery for Madhya Pradesh and Maharashtra cotton is Rs 39,500 per candy (356 kg), down from the current spot price level of Rs 41,500,” said Dhiren Sheth, a director at cotton trading company CA Galiakotwala.
Sheth said domestic mills were buying less, as they expect markets to remain weak. In the global market, Indian prices are 10-15 per cent higher than the US, Brazil and Pakistan, he added. MNCs like Louis Dreyfus, Reinhart and Glencore were bidding for new season cotton at Rs 39,500-39,800 per candy, or 6-7 per cent lower than the current prices, said ginners.
“Indian exporters are apprehensive of buying even at this rate on the fear of weak demand due to US-China trade war and the global economic slowdown,” said Cotton association of India director Manish Daga.
He said prices were weighed also by huge stocks as state-run Cotton Corporation of India was holding 8-9 lakh bales (170 kg each) and mills and ginners were having 35 lakh bales.
Traders said there was some buying by mills like Vardhman, Trident and Nahar. “No mill is taking a call on long-term purchase. Buying is less by 50 per cent this year compared to last year. Mills are just signing contracts to meet their monthly requirement as they expect volatility in the market to continue,” said Vinay Laddha of Vikas Traders at Madhya Pradesh’s Badwani district. Rains and the overall weather in the next one month will be crucial for the crop, which will be harvested by October, he added. (Source: Economic Times)