Daily arrival of cotton fell below 90 thousand bales
05-Mar-2025 05:54 PM
The cotton market is currently experiencing some challenges as the daily arrival of cotton has fallen below 90,000 bales, which is significantly impacting the supply chain. Here are some key points from the situation:
Decreased Cotton Arrivals: The average daily arrival of cotton in the major producing states has reduced to below 90,000 bales, out of which only 40-50 thousand bales are being purchased by the Cotton Corporation of India (CCI). Ginners are getting a limited supply of around 40-45 thousand bales, while they need about 1 lakh bales per day.
Ginning and Cotton Purchases: Cotton ginning mills have started increasing their purchases to build up stock, as they need to prepare for the off-season when cotton supply is lower. The current market price of cotton is slightly below the minimum support price (MSP), which is encouraging ginners to stock up at this price point.
Textile Mills and Stocking Concerns: Cotton textile mills are holding back on purchasing cotton at high prices, as they prefer to keep their stocks at a minimum level, only enough to meet a month’s production requirements. This cautious approach is limiting the buying activity in the market.
Government's Role: The Cotton Corporation of India (CCI) has already procured over 94 lakh bales of cotton in the current marketing season, and there is an expectation that the corporation will eventually begin selling off this stock, which may help stabilize prices.
Price Dynamics and Market Sentiment: The cotton price is currently fluctuating between Rs 53,000 and Rs 54,500 per candy (356 kg), depending on the quality. The market is largely waiting for a price increase, but this is believed to be contingent on the rise of futures prices on the Intercontinental Exchange (ICE). The overall market sentiment is one of uncertainty, with both challenges and potential opportunities arising from the situation.
The outlook for the cotton market is uncertain, with the balance between supply and demand, government stock, and global price trends likely playing a crucial role in how the market evolves.