Buying by exporters may raise cotton prices this week, although higher supplies in spot markets could limit the uptrend.
High supplies in spot markets have risen from 200,000 bales per day to 240,000 – 250,000 bales (170 kg each). However, supplies in spot markets this year are still down 7% from the same time last year.
A lot of buying is from traders who are expecting a revival of demand from China. This trend is also raising prices in local markets.
The Cotton Association of India showed the most traded variety in the spot market — Shankar-6 — closed at about 80.4 cents per lb.
Exports from India to Southeast Asia are expected to double in 2013, which may make up for the lack of demand from China , which is traditionally the biggest buyer of Indian fiber. Demand for Indian cotton from Bangladesh and Indonesia is likely to rise, as these countries are increasing production to meet higher import orders from China.
It is suggested India’s exports may drop to 60 per cent in the market year ending July compared to last year’s levels.
India, the world’s second-largest exporter of cotton, shipped an estimated 14.7 million bales in the last marketing year but is predicted to only export 5.7 million bales this marketing year.