According to foreign reports, Indian cotton farmers are rushing to sell new cotton due to concerns about a new outbreak of the epidemic, leading to a new round of blockade. The daily volume of new cotton on the market has increased to 250,000-300,000 bales, and the price of seed cotton has also increased from 6,000 rupees per cubic meter at the end of November. Quantum has fallen to the current Rs 5,300-5,850/quintal.
As prices fell, CCI acquisitions grew significantly. According to official statistics from CCI, a total of 4 million bales have been acquired so far. According to CCI, in the second half of November, as domestic seed cotton prices in India were close to the MSP, cotton farmers tended to sell to private traders, so CCI purchased only 2.8 million bales. However, the situation has changed quickly in the past 10-12 days. The new round of epidemic has prompted cotton farmers to speed up sales, and the pace of new cotton listings has accelerated significantly.
The Cotton Association of India said that on November 30, 2019, the cumulative volume of new cotton on the market in India was only 5.6 million bales, while in the same period this year it reached 9.2 million bales, an increase of 40%. It is expected that by the end of December this year, the volume of new cotton in India will reach 45-50% of the total output, putting greater pressure on prices.
In 2020/21, the MSP price in India was 5,850 rupees/quintal. Under the influence of the CCI acquisition, the price of seed cotton once rose to 6,000 rupees/quintal on November 23, and then fell. It is currently at Rs 5300-5400/quintal. Traders said that if India’s cotton export demand increases again, the possibility of seed cotton prices continuing to rise cannot be ruled out.
Last week, India’s CAI estimated that India’s cotton exports this year will increase from 5.4 million bales to 6 million bales (170 kg/bundle). However, some cotton merchants believe that due to active export demand, the actual situation will exceed 6.5 million bales. At present, the export price of Indian cotton is 40,000 rupees/kand, while the price in most other regions is 41,000 rupees/kand.
CAI said that the second outbreak of the epidemic in Europe and the United States in early December caused international cotton prices to fall, and Indian cotton lost its competitiveness. Moreover, textile mills have purchased 1-2 months of inventory, and the price of Indian cotton has dropped from 37,000 rupees. / kander rose to 41,500 rupees / kander, Indian cotton exports began to slow down, and the price was 5-7% lower than the domestic price.
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