Cotton prices dip to Rs 2,400/qtl in Indore

Currently, cotton in the prominent mandis of the Nimar region is selling in the Rs 2,400-2700 a quintal range.

During the first fortnight of January, the prices began to fall by Rs 100 a quintal on a daily basis. So, the farmers became eager to sell out their stocks to the traders at the earliest, in contrast to their tendency to hold stocks so that they could sell at higher prices when the prices were going upwards daily till the beginning of 2006.

At the start of this year, the selling prices of cotton in the Nimar mandis were in the Rs 4,500-5,000 a quintal range. The prices reached a peak on the back of a daily hike of Rs 100 a quintal. This upswing made the cotton traders desperate for stocks. They persuades the farmers to sell to them as much as possible everyday they approached them "" and that too on cash deals.

However, the traders gradually discontinued making spot payments on lack of funds, as they were paid only in installments by the ginning factories they supplied cotton to.

The scenario has changed so much over the last fifteen-odd days that the farmers, who fear the rate would go down every next day, are now seeking to sell even on credit. The traders too are not making cash payments any more.

The market, at present, has very good cotton stocks on the back of huge arrivals from the farmers. The quality of cotton, too, is good. Inferior quality remained with the farmers.