MUMBAI (Commoditiescontrol) – This week’s more than 2 per cent fall on Indian cotton (Shankar-6) prices, has pegged it even more competitive on the global market. It has now converged with US Futures (down 1 per cent) and KCA spot (up 1 per cent). Its discount to Cotlook A index has also widened to 9 per cent as the fall in the index was slower than Indian cotton. Two weeks ago the discount was narrower at less than 5 per cent.
The drop in Indian cotton prices was pressured by surge on arrivals, which aggregated close to 7 lakh bales from about 4.5 lakh bales in the previous week. And these arrivals are poised to surge further as cash crunch ease and farmer accepting bank cheque. Eventually, prices will go down further as 350 lakh bales that were estimated to have been harvested this year, only 12 per cent has arrived. 50 lakh bales are targeted for exports, of which, 13 lakh are already contracted.
Cotton yarn prices on domestic yarn market have lost Re1 a kg across most specs, reflecting the downward trend in cotton, which could accelerate in the coming weeks.
(By Commoditiescontrol Bureau; +91-22-40015522)
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