Weak demand from mills in Pakistan pushed cotton prices down by about three per cent over the week. Prices also declined due to poor export demand. Cotton exports in December were good but reversed in January, giving back the fiber to domestic mills. Prices are expected to decline further in the coming weeks.
Cotton was ruling at Rs 33,200 to Rs 33,500 per candy as against Rs 34,500 a week ago. Kapas prices too fell six per cent during the week. International cotton futures also tumbled to a one-year low due to sluggish demand that had an adverse impact on domestic demand and thus prices declined. Furthermore, mills were seen buying only as per their needs which will pressurise cotton prices more in coming days.
Cotton markets in India continued to reel under demand pressure. In India, cotton production is pegged at around 33 million bales for the October 2015-September 2016 crop as against 38 million bales last year. India is likely to harvest 35.2 million bales in the 2015-16 season, down 3.6 per cent from its previous estimate.
In New York, cotton for March delivery dropped 2.3 per cent, the weakest level for a spot contract since January last year. Expectations of weak demand in China led to the downfall in global markets.