Textile Demand Holds the Key to Cotton Price course, Says International Cotton Advisory Committee"
The recent surge in global cotton prices, attributed primarily to speculative buying on the futures market, has left the cotton industry anxiously awaiting the trajectory of textile demand. Despite subdued demand from textile mills, domestic cotton prices have seen a significant increase in the last two weeks.
Nishanth Asher, Secretary of the Indian Cotton Federation, revealed that over 60% of the cotton produced this season has entered the market. However, with rising prices, daily arrivals have dropped from 1.8 lakh bales to nearly one lakh bales. Asher pointed out that spinners are now risk-averse due to the low global demand for textiles.
The uncertainty surrounding future prices is evident, with world cotton prices experiencing a 15% surge in the last two weeks and a subsequent 3% correction on Friday. Asher stated that the price trajectory will largely depend on the demand for main textile products. If demand remains subdued, prices are expected to cool down.
The International Cotton Advisory Committee, on March 1, noted that the recent surge in global cotton prices can be attributed to speculative buying on the futures market. The committee expects the real situation to unfold in the coming months as plantings intensify. If the planted area remains lower than the previous season and consumer sentiment improves, prices may increase.
Atul Ganatra, Chairman of the Cotton Association of India, highlighted that the Intercontinental Exchange (ICE) futures market rose from 80 cents to 103 cents per pound in recent days and slightly reduced on March 1. He emphasized that, at current prices, Indian cotton is more affordable than international prices, predicting that cotton exports are likely to exceed 20 lakh bales this season.
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