The general run on commodity prices in early June in response to weak macroeconomics combined with the perception of oversupply in cotton were largely responsible for the sharp drop in cotton prices. July contract on the futures market reached US cents 66.89, traders decided that cotton had reached a n attractive price and started buying. July contract recovered sharply, closing the month at US cents 72.16. US cotton futures lost US cents 2.63 in June. The new benchmark, December cotton contract on ICE Futures closed at US cents 71.33 per pound.
The Cotlook A index too lost US cents 5.57 ending the month at US cents 81.20. In Pakistan, the spot rate averaged PakRs.5,980 per maund ex-Karachi. The Karachi cotton market witnessed a range-bound trading with shrinking fine lint stocks that kept the physical prices strong.
In India, the minimum support prices (MSP) for cotton (medium staple) was raised from Rs 2,800 to Rs 3,600 and cotton (long staple) from Rs 3,300 to Rs 3,900 per quintal. Demand from southern mills and north Indian spinners boosted spot cotton prices across the country in the last week of the month. Sankar-6 cotton in Gujarat traded at Rs 33,800- 34,200 a candy. Cotton traded firm in north India backed by good demand from local spinners. J-34 was quoted in the Rs 32,200 per candy.