Cotton may rise on low arrivals

Spot cotton prices are likely to rise marginally in the week ahead on depleting arrivals and fresh demand from yarn and textile mills, traders said.

"Prices started rising since Tuesday as daily arrivals are slipping day by day. On Thursday, national arrivals were only 57,000 bales from 75,000 bales about a week ago. This can lift prices marginally," said Samir Ghosh, analyst at Kotak.

He said prices could rise slightly also because of fresh inventory build up for summer by yarn and textile mills after Mar 31.

Ashok Daga, president, Coimbatore Cotton Association, said spot prices will recover next month onwards when mills in South India are likely to resume buying.

Daga said prices could go up also tracking expected higher trade volume.

The volume is seen higher on reduction in central sales tax to 2 per cent from the existing 3 per cent.

Meanwhile, Rajkumar Rungta, secretary, Maharashtra Cotton Brokers Association, said prices may go up because sellers were holding stocks for better prices.

He said prices of Mech1, the much sought after long-staple variety from Maharashtra, could rise this week to Rs 22,000 a candy (356 kg) from Rs 21,600 on Thursday.

Traders said export activities that have started in a small way is also likely to support a price rise.

"Buying for export of Kalyan 797, a short staple variety ideal for making denim, has started. Its prices have already gone up on Thursday," said trader Dinesh Nagda at Bhaidas Cursondas & Co.