India Cotton Prices Seen Rising This Week On Mill Demand
Dated- 08 Aug , 2012 - India
Cotton prices in India are likely to rise this week on higher purchases by yarn makers amid concerns of a decline in output in the next crop season starting October as scanty rains curb sowing.
"Yarn makers are buying in higher quantities as they have very good export orders and are struggling to meet raw material requirements," said Arunbhai Dalal, a trader based in the western state of Gujarat.
On Monday, the most-traded Shankar-6 variety rose 800 rupees to 38,200 rupees per candy of 356 kg, data from the Cotton Association of India showed.
At 0937 GMT, the key August cotton contract on the Multi Commodity Exchange (MCX) was trading down 0.33 percent at 18,250 rupees per bale of 170 kg on Tuesday.
"Cotton prices are likely to rise in the next few weeks as fresh supplies would start hitting the market only from October, only then could there be a price correction," said another trader based in Mumbai.
The fibre's prices could touch 40,000 rupees per candy by the end of this month, traders said.
Tight domestic supplies of the fibre and lower prices in the overseas markets have prompted some textile mills to ramp up imports.
"Cotton imports will not have much impact on prices in the local market as the quality of the imported ones is not very good," Dalal said.
Most farmers in India plant cotton in the months of June and July with the arrival of the monsoon season and begin harvesting after October.
India's cotton year runs from October to September.
Cotton output in India in the 2011/12 season ending in September rose to 34.7 million bales, according to an estimate by the Cotton Advisory Board.