‘Textile demand to determine price trajectory in cotton’
Even as demand for cotton from textile mills remains subdued, traders say sustainability of the trend of a surge in domestic cotton prices in the last two weeks will depend on demand for textiles and apparels.
‘Low global demand’
As per Nishanth Asher, secretary of the Indian Cotton Federation, more than 60% of the cotton produced this season has come to the market. With prices going up, arrivals have reduced from 1.8 lakh bales a day to almost one lakh bales a day. “Spinners are risk averse now as the global demand for textiles is low,” he said.
“It is hard to say now what will happen to the prices. World cotton prices went up 15% in the last two weeks and corrected 3% or so on Friday. The prices will cool down if the demand for the main textile products remains subdued,” he added.
The International Cotton Advisory Committee (ICAC) on March 1 said the recent surge in global cotton prices “can be attributed primarily to a wave of speculative buying on the futures market.” The real situation will unfold in the next few months when plantings intensify. If the planted area remained less than the previous season and consumer sentiment improved, prices would increase, ICAC observed.
“World cotton prices went up 15% in the last two weeks. Prices will cool if demand for textile products remains subdued.” NISHANTH ASHER
Secretary, Indian Cotton Federation
‘Indian cotton cheaper’
Atul Ganatra, chairman, Cotton Association of India, said the Intercontinental Exchange (ICE) futures market went from 80 cents to 103 cents for a pound in recent days and eased a tad on March 1. At current prices, Indian cotton is cheaper than its international counterparts and hence, cotton exports are likely to cross 20 lakh bales this season, he said.