Volatile instances: World cotton costs went up by 15% in the final two weeks and corrected 3% or so on Friday.
| Photo Credit: SIVA SARAVANAN S
Even because the demand for cotton from the textile mills stays subdued, merchants say the surge in home cotton costs in the final two weeks will depend upon the demand for textiles and apparels.
According to Nishanth Asher, secretary of the Indian Cotton Federation, greater than 60% of the cotton produced this season has come to the market. With costs going up, arrivals have diminished from 1.8 lakh bales a day to practically one lakh bales. “Spinners are risk averse now as the global demand for textiles is low,” he stated.
“It is hard to say now what will happen to the prices. World cotton prices went up 15% in the last two weeks and corrected 3% or so on Friday. Prices will cool down if demand for the main textile products remains subdued,” he added.
The International Cotton Advisory Committee on March 1 stated the latest surge in world cotton costs “can be attributed primarily to a wave of speculative buying on the futures market.” The actual state of affairs will unfold in the subsequent few months when plantings intensify. If the planted space stays lower than the earlier season and client sentiment improves, costs will enhance, it stated.
Atul Ganatra, chairman of the Cotton Association of India, stated the Intercontinental Exchange (ICE) futures market went from 80 cents to 103 cents for a pound in latest days and diminished barely on March 1. At present costs, Indian cotton is cheaper than worldwide costs and therefore, cotton exports are possible to cross 20 lakh bales this season, he stated.
