Cotton prices decline on poor quality, demand

Cotton prices have eased by 3 per cent to Rs 500 per khandi (1 khandi = 28 kg and 120 gms) in the Indore market last fortnight owing to poor quality of produce and slackening demand from the domestic as well as the international markets.

The prices of Y1 was quoted between Rs 14,500 and Rs 14,800 per khandi while the 25mm variety ranged between Rs 14,900 and Rs 15,100 per khandi. Cotton price of 31mm was trading at Rs 19,000-Rs 19,500 per khandi in the Indore market.

Cotton prices of most varieties, albeit a few, remained rangebound in Maharashtra during the last fortnight. Bengal Desi slipped to Rs 3684 per quintal from Rs 3740 per quintal in the beginning of the month. Jaidhar declined to Rs 3937 per quintal from Rs Rs 4218 per quintal on February 1.

J 34 came down marginally to Rs 4218 from Rs 4246. Brahma also followed suit to close at Rs 5062 per quintal from Rs 5090 per quintal registered in the beginning of the month.

"Around 15-20 per cent of the total cotton produce did not meet the quality standards. This year, about 65-70 per cent produce was of good quality but the rest were either partially or heavily damaged," said L S Saini of RRG Group, an Indore-based cotton trading firm.

Madhya Pradesh has witnessed an arrival of 8000-10,000 bales (1 bale = 170 kg). "We are witnessing excellent export enquiries from China and Bangladesh. The export is expected to remain high this year as world production is estimated to decline 1.2 million tonne this year," an industry expert said.

Price realisations would also remain robust, later this year, as the world cotton prices are peaking, said an expert. "Due to inventory built up on poor demand from across the country, cotton prices are expected to remain stable or may slump further by Rs 500-700 per khandi," Saini said.

K F Jhunjhunwala, president, East India Cotton Association, has already estimated cotton price to remain around minimum support price (MSP) this year.

"Over 100 cotton seed companies are competing with eachother for better quality. So, farmers are not only getting good-quality seeds but also these at competitive prices," Jhunjhunwala said.