Continued buying by mills, exporters sees cotton bloom .

Cotton prices strengthened to Rs 30,000-30,200 a candy (of 356 kg) as mills and exporters continued to make purchases. According to market sources, prices are expected to rule firm and are unlikely to fall below Rs 29,500 this month.

Cotton traded at Rs 29,800-30,200 a candy (of 356 kg) in Gujarat. It was quoted Rs 29,200-29,500 in Maharashtra. Arrivals in Gujarat were about 2,000 bales (of 170 kg). All-India arrivals were 6,000-7,000 bales.

“Mills are covering for season end; exporters too are buying to fulfill orders. This has strengthened prices. Cotton will trade between Rs 29,500 and Rs 30,200 till the new season starts,” said Mr Bharat Vala, President of the Saurashtra Ginners Association. In Erode, cotton prices witnessed a record rally at the Bhoodapady Regulated Market on Wednesday. The price of the fine variety increased Rs 11 a kg. Fine variety Surabi fetched Rs 50 a kg against Rs 39-43 last week. Farmers said the increase of Rs 11 is an all-time high. Four years ago, the price increased Rs 10 a kg on a single day.

Similarly, another fine variety MCU-5 ruled at Rs 44-46 a kg. This is Rs 8 a kg higher than last week's price. Totally, the fine varieties arrival was 5,500 bags (100 kg each) and all the quantities were purchased by five bulk buyers.

On Wednesday, Bt cotton rose to Rs 35-Rs 40 a kg. This is Rs 5 higher than last week's rate. About 1,000 bags of Bt cotton were purchased by three bulk buyers.

Asked about the sudden spurt in prices, Mr Eswaran, Supervisor of the Bhoodapady Regulated Market, said: “Using the cotton purchased in the market, 40 count yarn may be produced by spinners. The demand for the 40-count yarn is high in the market and also it fetches good price. So, heavy demand for the fine varieties was seen on Wednesday.”

Further, “the cottonseed oil price has increased in the futures and local markets. Cottonseed went up to Rs 7,000 a quintal,” he said.

In the Anthiyur Regulated Market also, the prices of Surabi and MC5 have risen by Rs 8 a kg. The product was sold at Rs 44 to Rs 46 on Monday. About 2,800 bags were sold in the auction.

In fact, farmers lamented that they brought lower quantity for sale as they didn't expect such a hike in the price.

Source : thehindubusinessline.com