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Cotton prices soar on supply, demand mismatch and global cues

09 Feb 2011 Evaluate

Cotton prices soared on supply-demand mismatch in the spot market and a rising trend in the global market. Prices for Shankar-6 in Gujarat increased to Rs 56,000 a candy (of 356 kg), from around Rs 52,000 on Monday. At the Rajkot Agricultural Produce Marketing Committee (APMC) yard, the modal price or the rate at which most trades took place increased to Rs 6,500 a quintal, from Rs 5,575 on Monday. Quality cotton fetched as high as Rs 6,610.

At Rajula APMC in Gujarat, the modal price for the fine variety increased to Rs 6,575 against Rs 5,775 on Monday. Arrivals at Rajkot APMC were 500 tones (750 tones) and at Rajula, it was 380 tones (750 tones). In Madhya Pradesh, raw cotton modal prices at Ratlam APMC yard for DCH-32 increased to Rs 7,605 against Rs 7,210, despite higher arrivals of 15.53 tones (11.3 tones).

In Khammam, Andhra Pradesh, higher arrivals kept prices steady at Rs 5,300. Global prices have gained momentum after dropping during the weekend. The price rally has resumed on fears that the supply will not be able to meet demand, especially from China.

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