NEW DELHI (Commodity Online) : Global cotton prices continued to scale new highs as unusually heavy rain and cloudiness in major producer India, which caused yield and quality losses, adds to the woes.
The excessive rain slowed cotton maturation, and delayed the start of harvest in several areas.
The extended wet spell is likely to have wide ramifications for the flowering season and farmers are apprehensive about the fate of their crops as the natural cycle has gone haywire.
Another reason for the prices to remain clutched on top is projected decline in top producer China's 2010/11 cotton production, which was sliced by 1.0 million (480-lb) bales to 31.5 million, its imports raised to 13 million bales from an earlier estimate of 12.75 million, and its ending stocks dropped to 14.72 million from 16.01 million.
Analysts said, Indian export restrictions, which have been behind the jump in prices to records in both the US, the top cotton exporter, and China, the main producer, consumer and importer of the fibre, is likely to extend over these conditions.
India is expected to harvest a bumper crop of 32 million bales this season
In India, cotton yarn prices, which were ruling at Rs 185 a kg in August this year have now touched an all time high of over Rs 240 a kg, an increase of Rs 55 per kg in a short span of two months.
The Indian apparel industry observed a nationwide agitation in protest against the continuously rising prices of cotton yarn last week.
In Tirupur, Tamil Nadu, India’s one hub for apparel making and exports, about 1,00,000 people observed a hunger strike. These comprised of factory owners, workers, trade unions, etc.
Meanwhile, Indian textiles Minister Dayanidhi Maran said cotton yarn prices would stabilize by December 15.
He specifically told the spinning sector to not take advantage of rising cotton yarn prices as they had been steadily increasingly and in the process, create undue problems, as the government is very much concerned about the weavers.
New York cotton futures rose the maximum allowed by exchange limits last week, to hit a fresh record of 151.23 cents a pound, reaching an all-time high too on China's Zhengzhou exchange.
New York contracts were pinned against the exchange ceiling by a cut to the estimate for US stocks to 2.2m bales, their lowest since 1925, reflecting both lower production hopes in Texas and higher export expectations.
Volume traded in US cotton reached almost 45,400 lots, about a quarter above the 30-day average of 34,200 lots.
The cotton futures sustained rise for some weeks will lose heat or otherwise major players had no meeting ground and differed. As it is apparently China's emerging role in keeping cotton unwavering seemed to many.