India - Cotton prices seen steady, government buying balances low demand
Dated- 11 Apr , 2012 - India
Cotton prices in India are likely to remain steady this week after rising for two straight weeks as low demand from yarn and textile-makers is seen offsetting higher buying by government agencies.
"Despite government intervention, prices are unlikely to rise due to low demand from textile makers, though it could prevent prices from falling," said Arunbhai Dalal, a trader based in Gujarat.
India has decided to build cotton reserves of 2.5 million bales of 170 kg each to meet the needs of the domestic textile industry and the state-run Cotton Corporation of India (CCI) has been directed to intervene in the market to ensure stability of prices.
Prices could rise next month as textile-makers are likely to start buying to meet festival demand requirements during October-November period, Dalal said. On Tuesday, the prices of the most traded Shankar-6 variety were unchanged at Rs 34,000 per candy of 356 kg each, data from Cotton Association of India showed.