Cotton prices improved due to reduction in sowing area and delay in arrival of new crop

28-Aug-2024 07:20 PM

Mumbai. Cotton prices improved a bit due to the supply and availability situation in the domestic sector being complex, a huge decline in sowing area and the possibility of 15-20 days delay in the preparation of plucking of new crop.

According to trade analysts, its prices are likely to remain stable and strong in the coming days.

There is a possibility of damage to the cotton crop due to heavy rains and waterlogging in the fields in some parts of two top producing states - Gujarat and Maharashtra.

During the last fortnight, spot prices of cotton have increased by Rs 1500-2000 per candy (356 kg) or 2.50-3.00 percent.

According to a leading trade organization - Cotton Association of India (CAI), the arrival of cotton in wholesale markets is decreasing significantly.

Its demand and supply equation remains complex and at the national level, the sowing area has declined by more than 10 lakh hectares.

When the current marketing season ends at the end of September 2024, the total outstanding surplus stock of cotton will be around 20 lakh bales (each bale of 170 kg).

According to the Union Agriculture Ministry, the production area of ​​cotton in the current Kharif season has come down to 111.40 lakh hectares, which had reached 122.75 lakh hectares last year.

On the other hand, the futures price of cotton in the New York Exchange increased from 66.35 cents per pound to 70.35 cents per pound. This has also had some impact.

There is a strong possibility of reduction in domestic production of cotton during the marketing season of 2024-25.