Cotton prices dropped on Friday as demand petered out with most buyers keeping off due to Diwali. The trend was despite lack of arrivals. Most of the markets have almost been closed. Markets are likely to be shut for 10 days in Gujarat.
Gujarat Sankar-6 cotton declined Rs 200-300 to Rs 40,800-41,200 for a candy (356 kg).
Kapas or raw cotton quoted at Rs 985-990 for 20 kg for gin delivery.
Traders said that only a few buyers came to market. Moreover, quality issues cropped up, resulting in demand weakening.
According to cotton brokers in Rajkot, export demand is likely to trickle in after Diwali or from mid-November.
This year, cotton production is expected to be a record high of over 370 lakh bales (170 kg each) despite untimely rains in major growing areas.
Following floods in Gujarat and Andhra Pradesh, traders initially feared that the cotton crop would be affected, but now they say that the damage was not as feared. and had that late rains and floods would not have happened the crop could have been even higher.
Bloomberg reports : Cotton capped the longest slide in 34 years as the harvest accelerated in the US, the worlds top exporter, compounding a global glut.
Texas and Georgia, top growers in US, will have mostly dry conditions in the next two weeks, accelerating the harvest, David Streit, an agricultural meteorologist at Commodity Weather Group in Bethesda, Maryland, said.