Cotton prices surge on fears of rain damage

Spot 28mm cotton prices in Akola, Maharashtra, are expected to go up by 500-1,000 rupees a candy (1 candy=356 kg) in the next few weeks on fears of crop damage due to floods and rise in demand, traders said.

"Fears of crop damage is leading to rise in prices as heavy rains have lashed the crop growing areas of Maharashtra, Andhra Pradesh, and Orissa," said Sharad Gupta, an Akola-based trader.

Akola is the major market for 28mm cotton in the country. Orissa has also started re-sowing as the crop, which was sown in the end of June, had been destroyed due to excessive rains, he said.

Crop damage in Andhra Pradesh, if any, will be established only after two to three days, traders said.

Water logging in cotton fields for more than two days is bad for the crop and they become susceptible to diseases and worms, Gupta said.

New cotton crop, which was expected by October 15, is likely to be delayed another couple of weeks due to heavy rains and water logging, traders said.

Demand for 28mm cotton is also rising with exports of around 4.5 mln bales (1 bale=170 kg) to China and Bangladesh, traders said.

On Thursday, spot 28mm cotton in Akola was up 200 rupees a candy from Wednesday at 17,500 rupees, traders said.

Spot prices of 28mm cotton in Akola have risen by 600 rupees a candy since last Thursday.