Cotton arrivals in India decline by 19pc on weak demand, stock holding

The total seasonal arrival of cotton in India has dropped by 19% so far this year as compared to arrivals during the same period last year and this is because of the dull demand from domestic mills and increased holding capacity among farmers.

By the end of January 2016, the country’s total seasonal cotton arrival was about 17.02 million bales (a bale of 170 kg) as compared to 21 million bales by the end of January 2015.

However, as compared to the total estimated cotton production of 36 million bales, the arrivals of 17.02 million bales forms around 47% of the output.

Arun Dalal, an Ahmedabad-based cotton trader said that the rise in export demand during November and December 2015 pushed up farmers’ expectations. As a result, in hope of better returns, farmers are holding on cotton stocks which has resulted in fall of arrivals for the season till January 2016 as compared to the same period last year, he opined.

In major cotton producing states like Gujarat, daily arrival of cotton has come down from 55,000 bales to 40,000 bales a day in recent times.

Besides, prices have also begun falling due to weak buying by domestic textile mills. Against this, daily arrival across India is being registered at 130,000 bales as against 160,000 bales two weeks ago.

Nayan added that the estimates of fall in production made farmers’ expectations high this year, which encouraged them to hold their produce.

According to Dalal, as on January 31, 2016, about 17.02 million bales of cotton arrived across India which last year was 21.04 million bales at the same time. A leading cotton growing state, Gujarat witnessed a fall of about 1.5 million bales to 4.1 million bales this year so far as against 5.60 million bales in corresponding period last year.