Cotton prices may dip on improved weather

Improving weather in Gujarat's Saurashtra region is likely to push the prices of cotton down in the coming days. Cotton arrivals from the districts of Junagadh, Bhavnagar and Amreli, were expected to resume, after the recent disruption due to rains, and bring the prices down, traders said.

The recent spell of rains in the Saurashtra region also caused minor damage to the cotton crop. Traders estimate the damage to be around 5 to 7 per cent. The damaged quality of

cotton is currently being sold at Rs 470 to Rs 480 per 20 kg at Rajkot.

The traders expect a delay of 10-15 days for fresh arrivals from the region. However, they expect the quality to improve and prices to come down.

"The rains might delay fresh arrivals by 10 to 15 days. However, once the supply resumes, the cotton prices may further go down. Cotton, currently, trades at Rs 21,000 per candy (356 Kg), after rising by Rs 100 due to supply disruption. But the prices are likely to dip on improved weather in the Saurashtra area. It might come down by Rs 500 in the coming days and reach Rs 20,500 per candy," said Kadi-based cotton trader Dilip Patel.

According to an Ahmedabad-based trader, the prices are likely to come down further.

"The improved weather is likely to affect the cotton prices, which could even fall to Rs 20,000 per candy in the coming days. At present, there are no indications that the prices of cotton will go up. The supply is adequate except for the disruption in some areas in Saurashtra. The sentiments are bearish following reports of record cotton production in the state as well as the entire country," he said.

"The three-day spell of rains have caused some damage to the cotton crop in Una, Kodinar of Junagadh district and in some areas of the Bhavnagar district. The damage is estimated at 10 to 12 per cent in these areas. The cotton crop in parts of the Amreli district, including Rajula, has also been affected. The damaged cotton is being sold at Rs 470 to Rs 480 per 20 kg at present, while the normal quality is being traded at between Rs 500 and Rs 520 per 20 kg," said Jatin Bhindora, a Rajkot-based cotton trader.

The state's cotton production is likely to touch 1.3 crore bales (270 kg each) this year, according to the textile ministry. The traders expect cotton exports to touch 65 lakh bales this year compared with 55 lakh bales last year.