Cotton prices in the global market have increased by four percent since the beginning of 2021 on US Department of Agriculture (USDA) projecting lower opening stocks, production and ending stocks this season (October 2020-September 2021), raising hopes of the commodity exports from India. Cotton Association of India (CAI) President Atul Ganatra said export demand is currently slow due to novel Coronavirus (COVID-19) lockdown in Europe and few more countries. His association has pegged exports at 54 lakh bales this season. On January 19, cotton in New York quoted at 81.29 US cents (Rs 47,075 a candy of 356) per pound for delivery in March against the previous close of 80.70 cents. Cotton for May delivery ruled at 82.60 cents (Rs 47,850/candy) and July delivery at 82.91 cents (Rs 48,025), all up over the previous close. In comparison, India’s Shankar-6 variety, a benchmark for exports, was quoted at Rs 43,400-43,600 a candy. On MCX, cotton for delivery next month was traded at Rs 21,420 a bale (170 kg), which converted to candy is Rs 44,856. “Prices in Indian markets are steady. We have seen a correction by Rs 500-800 last week,” CAI’s Ganatra said. Raw cotton prices are tending to regain after a drop in prices. In Gujarat Rajkot district’s Dhoraji agriculture produce marketing committee yard, raw cotton ruled at Rs 5,680 a quintal on January 19 against the previous close of Rs 5,655.

Prices had topped Rs 5,700 a quintal on January 5 against the minimum support price of Rs 5,515 this season.In its recent outlook for the cotton market, the USDA projected lower production in the US, Pakistan, and Mali. It said it would more than offset the higher production in Greece, Turkey and Australia. In fact, the higher production in Turkey has been revised lower from a 16 percent increase to four percent. It said consumption estimates for China, the world’s largest consumer, and Turkey have been increased. China could import as much as 135 lakh bales, the USDA said. India, the world’s largest producer whose production has been pegged at 377 lakh bales by the US agency, could export nearly 64 lakh bales, it said. Poppat concurs with this outlook.Poppat said that one reason for the current rise in global prices was speculation. “Open interests in cotton have increased with many speculators going long (betting prices will rise further). This follows reports of China’s textile exports being higher than last year,” he said.  If the cotton futures in the global market rise another 3-4 cents, it could tend to push up Indian prices, he said, adding that prices in Gujarat were lower than in Maharashtra.