Cotton farmers are becoming smarter as they are holding the crop that they have stocked their harvest in the storage facilities they constructed from additional income they generated from last year’s earnings.
Indian traders that booked orders from China, Bangladesh, and Vietnam are struggling to buy the commodity. The cotton prices in the local market are higher than the global rates while farmers are not offering their stocks for sale. Farmers hope that the prices will go up in the coming months.
Cotton harvesting in India started last month and crop size is also good but farmers expect the rates will improve. Last year the Indian cotton farmers got record high prices and they expect the same prices this year. The market experts, however, doubt that they will get the same prices this season because local cotton production has increased and global prices are on the decline.
Cotton prices reached the roof in June this year on the strength of high global prices as well as a shorter crop last year. The prices have eased by up to 40 percent from June’s peak. Farmers rue that last year they disposed of their produce at 8000 rupees per 100 kg and it was a very good price. But after they sold their crop the prices jumped to 13000 rupees. Farmers are adamant that they will not sell cotton below Rs10000 rupees.
This year only 70000 cotton bales were exported by Indian traders, compared with more than 500000 bales during the same period last year. Cotton is selling in India at a premium of 18 cents per Ib and exports at this rate are not viable.
