NEW DELHI: India may continue to witness high cotton prices beyond mid-December, even after the arrival of new crops and irrespective of changes in global prices.
Traders say prices could rise up to. 43,000/candy, weighing 356 kgs, since November arrivals are expected to be limited because of exports. High global prices are keeping Indian cotton farmers and the farm ministry bullish on export sentiments.
During just 10 days to October 11, the textile commissioner’s office received applications for 5.5 million bales of exports, forcing the government to down shutters in a hurry.
Analysts expect that while prices could dip marginally after the US and Indian harvests come in, they would remain above $1/lb for several months on the back of unusually low stocks in the world market.
On Wednesday, New York December futures contract fell over 3% to $1.026/lb after the dollar rallied following China's surprise decision to increase interest rates and cool demand, encouraging investors to sell holdings of cotton. China is the world’s biggest cotton importer.
US cotton prices had hit highest level since the American Civil War on October 15, touching $1.198 on ICE Futures US.