Cotton procurement by CAI firms up prices in wholesale mandis

Procurement by Cotton Corporation of India (CCI) has helped firm up cotton prices in wholesale mandis. As per an Indian Express report, wholesale prices are now between Rs 5,300 and Rs 5,400 per quintal with trade sources not ruling out further price rise fueled by export demand.

Recently, CAI revised its earlier export estimates for the cotton marketing year (October to September 2020-21) to 54 lakh bales of 170 kg each from the previous 60 lakh bales.

But some traders said exports might cross 65 lakh bales given the demand in international markets, especially in Bangladesh. Indian cotton at present has a price advantage in international markets with the Indian candy (346 kg of ginned combed cotton lint) selling at Rs 40,000 per candy, as compared to Rs 41,000 per candy from other major cotton producers in the world.

Pradeep Kumar Jain, Founder Chairman, Khandesh Cotton Gin/Press Owners and Traders Development Association, majority of buying at present is by government agencies as private buyers are finding it difficult to get buyers given the slowdown in textile sector.

While Indian cotton is enjoying a rare price parity in international markets, Jain said favorable tail winds like demand from other countries or further increase in international price would see a price rise in domestic markets.