Global cotton supply crunch, India farmers hold stocks
Sunday, 31 October 2010
NEW DELHI, Oct 30 (Commodity Online): Cotton prices in the global market are spiraling abruptly due to restricted supply driven by estimated production fall in China and Pakistan. Floods that hit in the last month have almost washed away the crops in Pakistan and China, which led to a global supply crunch.
However, cotton production in India is forecasted to be bumper this season because of timely monsoon precipitation. Experts are of the opinion that the bumper Indian harvest could offset the global supply crunch, easing already topped prices.
Meanwhile, Indian cotton farmers are reported of holding stocks expecting to benefit from rising prices in the wake of lower supply.
Global cotton futures prices have jumped by more than 50 per cent over the past three months, reaching record levels on the ICE Futures US exchange Tuesday at around $1.30 per pound, outperforming a 15-per cent rise in gold prices during the period.
Local prices are hovering near record levels of Rs 44,300 per 356 kilograms, but are still Rs 4,000-Rs 5,000 cheaper than global rates, the trade and industry officials said.
Basu underscored that cotton supplies to local markets had obviously dwindled because farmers wanted better prices for their produce.
However, cotton production in India is forecasted to be bumper this season because of timely monsoon precipitation. Experts are of the opinion that the bumper Indian harvest could offset the global supply crunch, easing already topped prices.
Meanwhile, Indian cotton farmers are reported of holding stocks expecting to benefit from rising prices in the wake of lower supply.
Global cotton futures prices have jumped by more than 50 per cent over the past three months, reaching record levels on the ICE Futures US exchange Tuesday at around $1.30 per pound, outperforming a 15-per cent rise in gold prices during the period.
Local prices are hovering near record levels of Rs 44,300 per 356 kilograms, but are still Rs 4,000-Rs 5,000 cheaper than global rates, the trade and industry officials said.
Basu underscored that cotton supplies to local markets had obviously dwindled because farmers wanted better prices for their produce.