Cotton prices head north (India)

Global demand has pushed up cotton prices in the Andhra Pradesh market.

The average price of cotton in the markets across the state is above Rs 6,000 a quintal, while the lowest is Rs 5,160 a quintal, which was recorded at Adilabad market in the first week of February. Even the Guntur market saw a little less than Rs 6,000 when compared with Adoni, Jammikunta and Khammam markets, where the crop is with moisture.

On February 9, cotton ruled at Rs 6,829 a quintal at Adoni market in Kurnool district as against the minimum support price (MSP) of Rs 3,000 a quintal. The price, which was Rs 6,177 a quintal on February 4, had shot up in less than a week. At Jammikunta market in Karimnagar district too, cotton fetched Rs 6,020 a quintal in the first week of February.

According to the Cotton Corporation of India (CCI), as much as 3.2 million bales of cotton had arrived in the AP market by February 6 as against 2.9 million bales during the same period in 2009-10. AP was expected to produce 5.5 million bales for the current season, but the yield has come down due to the rains. The CCI and the cotton market are now anticipating around 4.5 million bales from the state.

In the southern region, only Tamil Nadu has seen a marginal decline in the crop with only 216,000 bales arriving in the market this season as against 290,000 in 2009-10. Karnataka saw an increase in arrivals this year with a total of 572,000 bales reaching the market this season as against 545,000 bales in the last season.

With regard to cultivation, all the three southern states have increased the area this year when compared with the previous year. While AP cultivated cotton in 1.4 million hectare in 2009-10, it increased the extent to 1.7 million hectare this year. Similarly, Karnataka increased the extent from 455,000 hectare in 2009-10 to 525,000 hectare this year, while Tamil Nadu increased the crop size from 104,000 hectare to 130,000 hectare.