Good supply, strong rupee keep domestic cotton prices stable

PUNE: Healthy supplies with a strong rupee boosting imports and a fall in New York futures have kept cotton prices stable in India at a time of the year when they usually increase. Trade executives expect the market to remain range bound in the next few weeks.

Normally, cotton prices tend to increase once arrivals from farmers begin to dwindle. This year, though, arrivals are still strong as farmers, who couldn't sell all their produce during November-December due to post-demonetisation cash crunch, are offloading the stock.

A recent release from the Cotton Association of India (CAI) confirmed the trend of higher arrivals in the market.

“Arrivals of cotton have accelerated their pace during March 2017. The arrivals during March 2017 are higher than that of the corresponding month during last year and the gap of arrivals as compared to last year has nar rowed down further,“ it said.

“There is a downtrend in international prices. Also, appreciation of the rupee has given a boost to cotton imports. These two factors have kept cotton prices under control,“ said BS Rajpal, a cotton exporter from Maharashtra. A stronger local currency makes imports cheap er. According to the US Depart ment of Agriculture's global cot ton outlook for April, 2016-17 cotton production is forecast at 106.3 million bales, 10% above last season, as yields rose in most major producing countries. The report forecast India's consumption to be 2% lower than a year earlier.