As per market sources, Shankar 6 cotton price in various markets of the state has surged to Rs 24,200 per candy on Tuesday. The prices stood around Rs 23,000 - 23,200 per candy last week.
"In the past 20 days, cotton prices have surged from Rs 22,500 per candy to Rs 24,200," said Arun Dalal of Arun Dalal & Co.
The prices have galloped by around Rs 1,000 per candy to reach the peak level in this season, said Kishor Shah, president, Central Gujarat Cotton Dealers Association.
Enumerating reasons for the jump in the prices, Shah added that the market is currently facing shortage following increased exports.
As per the latest estimates of Cotton Advisory Board (CAB), cotton export from India is likely to reach 8.5 million bales in 2007-08 (Oct-Sept) from 5.8 million bales in 2006-07.
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As of now, 7 million bales have already been exported in 2007-08. Another factor for price surge is that ginners are holding stocks to get better returns amid bullish market, say industry sources.
Appreciation in the value of dollar against the rupee has also contributed to firm sentiment in cotton prices. A weak rupee against the dollar is expected to further boost cotton exports.
Further, a firm rupee in first few months of the current year made a dent in cotton imports from some African countries, which created a kind of demand-supply mismatch in the domestic market.