By admin       2016-11-24

BENGALURU/AHMEDABAD, NOVEMBER 22: Cotton prices, which shot up last week in the immediate aftermath of demonetisation, even surpassing global prices, have begun to ease now with the increase in market arrivals amidst slack demand from spinning mills. Daily market arrivals improved to around 1.2 lakh bales (of 170 kg each) on Tuesday from around 80,000 bales last week, sources said. After rising to 41,000 levels per candy (355 kg) prices have now come down to 39,000-39,500 levels. Similarly, raw cotton (kapas) prices have come down to 4,900-5,000 levels from the 5,200-5,300 levels that prevailed last week. Also, cottonseed prices have come down by 100-150 per quintal to around 2,200-2,250, trade sources said. “Farmers have selectively started accepting payments through cheques, resulting in improved arrivals and easing of prices. However, there are no buyers for cotton as there is no onward movement of yarn from the mills,” said Ramanuja Das Boob, a ginner in Raichur, Karnataka. States such as Maharashtra, Telangana and Gujarat have seen some increase in market arrivals. In Gujarat, about five to six of the 30 APMC market yards for cotton trading were functional on Tuesday, while the rest remained shut due to the cash crunch triggered by demonetisation. Traders at Gondal and Botad, the leading markets, reported increased arrivals on Monday at 9,440 bags (of 20 kg each) and 16,420 bags respectively. The same was 3,000 and zero respectively a week ago. Cotton prices hovered in the range of 908-1,095 per 20 kg in these markets, while the other market yards reported thin trading with lesser arrivals. “Most APMCs remained closed due to the liquidity problem. There is a huge stock piled up with the farmers, but they are not bringing it to the market. Once the liquidity situation eases, we will see more arrivals and prices easing further,” said an official at Gondal APMC. “We had kept the market open and asked our trader members to issue cheque to the farmers. Those who had bank accounts did transactions,” he added. Other major cotton markets such as Amreli, Halvad, Visnagar and Rajkot did not have heavy arrivals on Monday. “Though cotton arrivals and prices have started easing, yarn is still not supporting us,” said J Thulasidharan, Managing Director, The Rajaratna Mills, and President of the Indian Cotton Federation. Demand for yarn in Bhiwandi, where the bulk of the trading takes place through cash, has taken a hit, affecting prices. However, Thulasidharan, striking an optimistic note, said things should stabilise in 3-4 weeks, when the peak season commences (December-April). The trade expects cotton prices to come down further with arrivals from December. Though acreage had dropped by close to a tenth this year, higher yields on account of widespread rains in key producing States — are expected to help maintain the output at last year’s levels, at around 336 lakh bales, according to the Cotton Association of India, the apex trade body.

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