Cotton prices rise 6% in a fortnight

Supply shortage, coupled with an exponential growth in export demand, helped cotton prices surge 6 per cent across all varieties over the past fortnight.

While Bengal desi today jumped to Rs 3,852 a quintal from Rs 3,768 a quintal, V 797 made similarly to touch Rs 3,824 from Rs 3,627 a fortnight ago. J 34 too appreciated substantially to close at Rs 4,527 compared with Rs 4,359 a quintal. NHH and Ira closed higher at Rs 4,584 a quintal (Rs 4,387) and Rs 4,809 a quintal (Rs 4,612) respectively.

Further, prices of H4 perked up to Rs 4,977 a quintal from Rs 4,780, while Shankar 6 closed at Rs 5,146, up from Rs 5005 a quintal two weeks ago. M26 made a substantial gain to settle today at Rs 4,696 a quintal from Rs 4,471 a fortnight earlier.

While explaining the reasons for the price rise, a Mumbai-based leading cotton trader said the daily arrivals had declined from usual 2 lakh bales to 1.25 lakh bales in the period under review. Besides, mills have started buying on fears of a further quality deterioration in the domestically available cotton. And above all, export orders "� led by China "� had swelled up, market sources said.

Recently, Pakistan too has started sourcing cotton from the country resulting in a huge demand and supply mismatch, the trader added.

Cotton exporters have cloaked orders worth 100 tonne of cotton so far this year.

Denying any unintentional buying in cotton, the trader said one could not trade in the commodity without understanding its nitty-gritty.

Total crop this year is estimated to decline to 265 lakh bales from the earlier estimate of 270 lakh bales. So far, the market has witnessed arrivals of 176 lakh bales this season.

Sharing the trader's view, P D Patodia, vice-chairman and managing director, Prime Textiles, said no speculative activity was going on in cotton, and the price rise was purely based on demand and supply situation.

Volume of trade in cotton has also gone up since the ban on tur and urad to 81,12,000 kg, as on February 2, compared with 20,44,000 kg on January 23.