Prices of cotton in the futures trade and at the farm gate have declined 8% and 12%, respectively, in the last fortnight, as farmers, who were holding the crop expecting prices to return to last year’s record-high levels, have started selling their produce.
The daily arrival of cotton in the markets has increased fivefold to 100,000 bales (each weighing 170 kg) from the historical average of 20,000 bales a day in May. “I have not seen such unusually high arrivals in May. Arrival of 100,000 bales a day is something that used to get over by January/February,” said Ravi Sam, chairman of Southern India Mills Association (SIMA).
The June cotton contract on the MCX was down 3.05% on Monday. In spot trade, cotton prices dipped from ₹62,000/candy (each candy is 356 kg) to ₹57,000 in Maharashtra, while the price of raw cotton with seeds sold by farmers to ginners has fallen from ₹8,000/quintal a fortnight ago to ₹7,000-7,200 on Monday.