New Delhi, Apr 11 (KNN) The cotton market has seen a downturn recently, with multinational traders in India starting to offload their stocks due to muted global demand and prospects of a better crop in countries like Australia.

The May cotton futures contract on the Intercontinental Exchange (ICE) touched a high of 103.80 cents on February 28 but has since eased to 85.89 cents on April 10. The December 2024 contract hovers around 82 cents.

International cotton prices have dropped by around 17-18 per cent from their recent highs due to weak demand, especially from China. Domestic prices in India have also declined by 8-9 per cent.

"Multinationals have started selling for April, May, June and July delivery, mainly due to the decline in ICE futures and low demand," said Ramanuj Das Boob from the All India Cotton Brokers Association, reported BL.

Cotton prices range from Rs 60,000 to Rs 62,000 per candy, about 3 per cent lower than a month ago. Cotton sold by multinationals like Viterra, COFCO International, and Louis Dreyfus Company is being purchased by traders and mills.

Despite a slowdown in arrivals, stocks remain sufficient with the Cotton Corporation of India (CCI), ginners, and traders. Daily arrivals across various states are around 50,000-60,000 bales of 170 kg each.

The CCI has procured 32.84 lakh bales at the minimum support price for the 2023-24 crop season and has sold 5.12 lakh bales so far, leaving stocks at 27.72 lakh bales.

Farmers and ginners are not happy this year due to unlucrative cotton prices, according to Pradeep Jain from the Khandesh Gin Press Factory Owners Association. 

Arrivals are negligible, and demand is poor, with farmers potentially holding back stocks in anticipation of better prices.

Most North Indian cotton mills have covered their requirements for the next six months. However, mills are buying cautiously due to limited demand for yarn at higher prices. Export opportunities are also limited due to a lack of price parity.

According to Sushil Phutela from the Indian Cotton Association Ltd, there is a shortfall in supplies in the North Indian market despite lower domestic prices.

The Committee on Cotton Production and Consumption has recently raised its crop production estimate for the 2023-24 season to 323.11 lakh bales from its earlier projection of 316.57 lakh bales.

(KNN Bureau)