Source: Business Standard
Despite expectations for a good crop, prices have been rising over the past two months, even though these are significantly lower than the global high of 2011. The minimum support price (MSP) for cotton was raised by a mere 3 per cent this year, and pricing pressures have come from high demand, particularly given the estimate of US stocks hitting a four-year low. Even though China is expected to discard its stock - reserve policy that has been propping prices up globally, till this materialises there is sufficient demand pressure in the export markets to keep Indian cotton prices buoyant. Currently, because of late maturing of cotton, arrivals in the mandis are still lower than anticipated and exports are also less than the last quarter. However, as domestic demand is strong and Indian yarn still the cheapest getting good export demand, the year ahead is not expected to see any significant softening of prices.
IPM data till week ending February 15. The Indicus Price Monitor (IPM), a product of Indicus Analytics Pvt Ltd, tracks real-time wholesale prices for 60 agricultural products from more than 3,000 mandis across the country. Due to differences in methodology, the actual levels of the IPM differ from the corresponding Wholesale Price Index. However, broad trends are in sync with each other.