Cotton prices shoot up while ginners face shortage in Gujarat
Cotton prices are on the uptrend amid missing accurate crop estimates while some pockets face shortage of kapas. In Gujarat, the second largest cotton grower in India, nearly 800 ginning and pressing units are reportedly facing acute shortage of raw cotton just about when the peak marketing season ended a few weeks ago. As a result, most of the units are operating at a mere 25-30% capacity.
According to Saurin Parikh, president All-Gujarat Spinners Association, cotton crop harvest is at least 50 lakh bales (170 kg/bale) lower than the previous year. He further added that the shortfall in crop has also adversely impacted prices as they crossed INR 46,000 per candy (355.5 kg) in April this year from Rs 42,500 a candy.
The uptrend is attributed to unclear availability of cotton across markets. While expressing concern over the current market situation and the firming up of cotton prices, the Indian Cotton Federation (ICF) has urged the ministry of textiles to intervene and the Cotton Advisory Board (CAB) to re-assess the crop situation in the country.
In a memorandum submitted to Sanjay Sharan, textile commissioner, J Thulasidharan, president, ICF pointed out that an artificial shortage has been created in the market leading to an unwanted increase in cotton prices, thereby affecting the already struggling textile and clothing trade and exports.
Various estimates have been floating on cotton production in 2017-18 crop year. Recently, confederation of Indian Textile Industry estimated production at 343 lakh bales while the Cotton Association of India expects it to be 320 lakh bales. Both estimates are smaller than the harvest of last year, but they also vary between themselves.
Meanwhile, average prices of Shankar 6 shot up from INR41,825 a candy in February to INR43,300 in March and further to INR46,400 a candy in the last week of April. Compared to global spot benchmark, Shankar-6 averaged US cents 84.86 per pound while Cotlook ‘A’ averaged US cents 85.41 a pound. The same were at US cents 85.22 and US cents 87.75, respectively as of 23 April.
