Cotton Prices Hit Record High Of Rs 55,500 Per Candy in Guj.

Cotton prices in Gujarat have touched a record high of Rs 55,500 per candy (One Candy is equal to 356 kg) today, a Cotton Corporation of India (CCI) official said here.

"Prices of the benchmark Shankar-6 variety of cotton are ruling between Rs 55,500 to 56,000 per candy in the spot markets here as the mill consumption has gone up and supply is low," a CCI official said.

The widening gap between demand and supply has fuelled the prices, he said.

"In the wake of worldwide shortage, cotton imports from countries like China, Pakistan, Uzbekistan and US are not viable as the price difference is anything between 15,000 to 16,000 per candy compared to domestic prices," a CCI official said.

"The revised cotton production in Gujarat during 2010-11 season (Oct-Sept) is pegged close to 1.03 crore bales (One bale is equal to 170 kg) against preliminary estimates of 1.10 crore bales," he said.

Anticipating a brisk demand of cotton from the mill owners, CCI in Gujarat has purchased around 2 lakh bales of the white commodity so far.

CCI has pegged cotton consumption by the mills in India close to 255 million bales in 2010-11.

"The escalating prices of cotton have broken all price records in the last 200 years. The price has touched a lifetime high of Rs 56,000 per candy. It seems some speculator lobby has entered into the market," Gujarat State Co-operative Cotton Federation (GSCCF) Managing Director N M Sharma said.

"The way cotton prices have risen by over Rs 15,000 per candy since January, it seems some speculator lobby has entered into the market," Sharma said.

According to Sharma, only 55 lakh bales of cotton have been registered for exports with the Director General Foreign Trade, after fresh allocation of 19 lakh bales quota for exports by the government.

"Taking into account exports of 55 lakh bales from the country, around 65 lakh bales are still available for domestic mill consumption so there is no shortage as such," Sharma said.

The government should intervene, otherwise genuine stakeholders will suffer badly, he said.

The prices of Shankar-6 were ruling at Rs 28,000 to 30,000 per candy in Gujarat between January to February last year, industry sources said.

Source : indianexpress.com