AHMEDABAD: With steady decline in arrivals of cotton amid strong domestic and export demand, cotton prices in the state have further firmed up to a six-year high. The price of Shankar-6 cotton variety jumped to Rs 48,500 per candy (a candy weighs about 356 kg) on Friday, which was ruling at Rs 44,000 per candy last month.
“The price of good quality Shankar-6 cotton has increased to Rs 48,500 per candy, which is the highest since 2011-12. Dwindling arrivals as the season nears end and strong domestic and overseas demand have pushed up the price of cotton in local market,” said Arun Dalal, a city-based cotton trader. In 2011-12, the price had touched Rs 54,000 per candy.
Increase in consumption of cotton by textile mills in the country and rise in exports have supported cotton prices this season. Cotton exports from India is likely to touch 70 lakh bales (one bale equals 170 kg) in 2017-18 with 62 lakh bales already been shipped. The exports were estimated to be around 60 lakh bales in 2016-17.
“If we talk about cotton consumption of textile mills in Gujarat, it has increased by 15 lakh bales this year and exports have also been encouraging. Mills are also operating on low stock keeping the demand buoyant,” said Dilip Patel, president, All Gujarat Cotton Ginners Association.
“The sentiment continues to remain bullish as China is expected to increase its cotton purchases next year. There is a strong likelihood that cotton exports next year (2018-19) may increase by 15-20%,” added Dalal. Anticipation of increased overseas demand, especially from China, amid low carry-over stock for the next year has kept cotton prices firm.
According to Cotton Association of India (CAI) cotton production in India is estimated to be 365 lakh bales and 108 lakh bales in Gujarat for 2017-18.