Unprecedented ups and downs in Indian cotton prices continue as, after a sharp decline in July, cotton prices have risen to Rs 96,000 per candy (356kg). Experts believe it will once again touch Rs 1 lakh per candy. Shortage of cotton and the possibility of delay in the arrival of new crop have driven up the prices.Rates of forward contracts for November and December have also increased significantly, say sources.
India saw cotton touching a lifetime high price of Rs 1.1 lakh per candy in recent months and it impacted the textile value chain badly. GujCot Trade Association secretary Ajay Dalal said, “India’s cotton production was 3.57 crore bales in 2020-21. There were projections of 3.63 crore bales in 2021-22 initially, but the crop was affected due to bad weather and now official projections suggest production of around 3.15 crore bales. This shows there is no availability of cotton. On the basis of initial projections, the value chain planned production and spinning mills worked at full capacity, so short supply against high demand resulted in a steep price hike.
“Last month, there was a significant drop in cotton prices but because of non-availability. However, the prices, which were around Rs 86,000 a month ago, increased to Rs 96,000 per candy level on August 12. There are possibilities that prices may again touch Rs 1 lakh.”
He said that forward contracts for November and December have also seen an increase of around Rs 10,000. So, contracts which were quoted at Rs 63,000 per candy last month are now being quoted at Rs 73,000 per candy, Dalal added.
GCCI textile committee co-chairman Rahul Shah said, “We have seen good sowing but there is fear of delay in crop arrival. Therefore, prices have increased. Following rise in cotton prices, different quality cotton yarn prices have also moved up but there is a lack of demand.”
