As much as 70 per cent of the cotton crop in India is believed to have already hit the market.
As arrivals rose cotton prices indicated a softening trend from their initial peak levels. But prices are again on an uptrend after the temporary dip.
The main export destinations are Vietnam, Bangladesh and Indonesia. This is expected to further fuel the bullish sentiment.
Yarn demand from China is expected to increase this year. So mill consumption in India will be more than expected, which will further put pressure on prices.
Fears of El Nino will also keep cotton prices higher.
Prices at procurement levels may scale up to touch Rs 6,500 per quintal while processed cotton prices are expected to jump to levels as high as Rs 48,000 per candy of 356 kg.
Farmers continue to realise a better price for their produce since cotton prices have remained firm. Cotton arrivals are in full swing now and the gap of arrivals as compared to last year has narrowed considerably in the preceding period.
Farmers have got prices as high as Rs 6000 per quintal for raw cotton.
The opening stock was about 4.5 million bales at the beginning of the 2016-17 season.