By admin       2018-07-02

report - June 29 2018 - Cotton prices are likely to stay firm during the next financial year following the tight demand-supply scenario, India Ratings and Research (Ind-Ra) said in its latest report. Lower fibre production in the current season (October-September) owing to crop infestation and acreage drop in the coming season (2018-2019) as well as adverse weather conditions in other key cotton growing nations could pose supply constraints, India Ratings said. However, the expectation of firming prices might encourage farmers to sow and arrest the acreage contraction. On the other hand, a robust domestic demand and rise in exports on account of the anticipated stock rebuilding by China are likely to keep the global consumption strong, the report said. Minimum support prices (MSPs) for Cotton are likely to be higher for the 2018-2019 season than for the previous season, it said. However, given the tight demand-supply scenario, Cotton prices might trade higher than MSP, limiting the government intervention, it added. Despite the firm Cotton prices, Ind-Ra expects margins across the Cotton value chain to remain more or less stable. This is primarily because a sustained demand from the end-user segments will allow manufacturers to pass on the price rise, it said.

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