Last Updated : 26 July 2012 at 11:15 IST
Cotton surges on high demand, lower production estimates
On the back of high global demand amid lower production estimates, the price of cotton in global as well as in domestic market is likely to surge higher.
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MUMBAI (commodity Online): On the back of high global demand amid lower production estimates, the price of cotton in global as well as in domestic market is likely to surge higher.
The global cotton production for 2012-13 is likely to drop on lower acreage under the crop and on hot and dry weather conditions in the major growing regions.
Last year, with the fall in demand from the textile industries on slow global economic growth, price of the commodity dropped drastically affecting the returns of the farmers. In U.S., the price of cotton crashed 67% from an all-time-high of $2.197 a pound in March 2011.
Presently, with the hike in demand from the textile industries amid lower production, the price of the commodity has rose in the global market.
Cotton prices in India, world second biggest supplier, surged to global levels for the first time in three years on high export demand amid rising domestic demand.
With the ongoing festival and upcoming wedding season, the demand for the commodity in the domestic market is high. While, the cotton production is expected to drop drastically on lower acreage under crop and deficient rainfall.
In India's National Commodity and Derivatives Exchange (NCDEX), cotton for February delivery during the month of July till date (24th July) rose 9.31% to Rs 1100 per qtl.
In the domestic market, the price of the commodity has risen to Rs 38,000 per candy (356 Kg) from Rs 32,000 per candy.
In Chicago Board of Trade (CBOT), cotton for October delivery, traded at 69.27 cents per bushel and in NCDEX, the commodity for February delivery traded up to Rs 1116.5 per qtl on 26th July at 10:45 IST.
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