Market Trends: Pay Attention To The Collapse Of Cotton Prices In India

According to foreign news on May 24, the cotton price in India has fallen by nearly 9% in the past two weeks, as cotton growers began to transport the cotton left in the past few months to the Agricultural Products Marketing Committee (APMC).

"Farmers in various states have changed their minds and are seeking to sell their seed cotton reserves. Anand Popat, a cotton, yarn and cotton waste trader from Rajkot, said:" The cotton import volume hit a record high in May and is expected to last until the end of June. "

"In the past few days, the daily arrival of cotton has increased to 100000 bales (170 kg/bale). The demand for yarn is negligible, and the export is affected by the recession trend. The demand for cloth is also weak."

According to the data provided by Agmarknet, the agricultural branch of India, the cotton arrival volume has reached a nine-year high of 182572.67 tons (1.073 million bales) so far this month. In 2014, India's cotton output reached a record high of 39.8 million bales, with 236800.48 tons (1.393 million bales) of cotton arriving in the same period of the year.

Popat said: "The daily arrival of seed cotton last week was 90000-110000 bales, with a total of 700000 bales."

"Panic attacks the market. There is no demand for yarn and cloth. No one is also buying cotton. There seems to be excess production," said Sachin Jhanwar, a yarn processor.

"As the demand of the whole value chain continues to be depressed, cotton prices are slowing down, which is consistent with the same trend," said Prabhu Dhamodharan, convener of the Indian Textile Entrepreneurs Federation (ITF).

At the Multi Commodity Exchange of India, the cotton contract in June is currently quoted at 58120 rupees per kandi.

This year, cotton growers will store cotton in their backyard and terraces, hoping that the price will rise.

Growers in Karnataka and Maharashtra stopped their production of agricultural products for the first time, and farmers in Gujarat usually stopped their production of agricultural products in the slack season starting in April.

Dhamodharan said: "In the whole value chain, the capacity utilization rate of textile mills is low. Since then, cotton prices will be consistent with the actual demand factors such as clothing exports."

The Cotton Production and Consumption Committee, an organization composed of all stakeholders, estimates that the cotton output in the current season (October 2022 to September 2023) is 32.723 million bales, but some traders are expected to be more than 34 million bales.

However, in the latest estimate made this month by the Cotton Association of India, a trade organization, cotton output is expected to be less than 30 million bales.

Popat said: "For those trading companies that sell in the forward market and are now covering their positions, the situation looks very favorable. The price decline is also beneficial to them."

DasBoob said, "In the next three months, we can see some cotton imports from Australia, Brazil and the United States."