Tuesday, May 10, 2011
India: Indian cotton markets crumble as trading gets paralyzed
By Seshadri Ramkumar
NEW DELHI (Commodity Online) : Cotton prices in India, one of the world’s top cotton markets, continued to crumble as trading remained paralyzed in country’s cotton markets.
According to South India Cotton Association, many factors including over stocking of cotton in anticipation of higher prices on speculative basis and lack of buying upstream have resulted this situation
Cotton yarn market is at a standstill due to processing house closures in Tiruppur area in South India, said K N Viswanathan, Secretary of the Association.
Furthermore, the spinning industry is facing serious power shortages and cotton spinners are facing uphill battle in selling yarn to weaving units, he added.
Sankar-6, benchmark cotton traded last Friday at Rupees 44,000 per candy (356 kg). It is now at Rupees 41,000-42,000 per candy with no takers. India is 24/7 market and no trading has occurred since last Friday, said Viswanathan.
Commenting on India’s cotton production for this season, he said, his association estimates the production to be 31.2 million bales (170 kg each), which is the estimate provided by India’s Cotton Advisory Board. He feels this season’s production will lie between 30.5 million to 31.2 million bales.
According to Viswanathan, arrivals since the beginning of this season till May 1st have been 28.7 million bales (170 kg each). He expects the daily arrivals for the next 30-35 days to be 45,000 bales per day.
V Srinivas, Joint Secretary, Ministry of Textiles, India confirmed that the production estimate for this season still stands at 31.2 million bales.
B. A. Patel, Joint Textile Commissioner, India said there has been no revision to the latest Cotton Advisory Board’s estimate of 31.2 million bales of 170 kg each.
(The author is Associate Professor at Texas Tech University and a regular contributor to Commodity Online)
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