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India's cotton prices may appreciate for a third week after exports resumed, but sharp rally is not expected as the exports are now allowed only against licenses, traders and officials said.
"Prices are rising ..now licenses are being allowed mostly to people who had earlier registered for shipment to Bangladesh and Pakistan," said head of a trade association on conditions of anonymity.
India, a major exporter of the fibre, had shipped 7.36 million bales (of 170 kg each) and had registered 8.53 million bales before halting further export registration on April 19, government data showed.
India on May 21 allowed export of cotton under license just as new plantings began and a month after it halted shipment registration to rein in domestic prices, an official with the textile ministry told Reuters. See [ID:nSGE64K0H1]
"There is about a million tonnes of the cotton that will be given license immediately," said Bipin Shah, a trader and exporter in Rajkot, Gujarat, who has registered a small shipment for Bangladesh.
Two trade officials said license for export of about half-a-million tonnes of the fibre has already been allowed.
Prices have risen over 9 percent in the past two weeks since exports were allowed. Prices for the most common Shankar -6 variety was quoted at 29,300 rupees per Candy (of 356 kg each) by Cotton Association of India.
"Demand from local millers and textile industry has also supported prices," said an official with Cotton Corp of India on conditions of anonymity.
India is the second-biggest producer, consumer and exporter of cotton and about sixty percent of the current season shipments went to China, the biggest consumer.
Analysts said the cotton prices globally will remain attractive due to tight stock situation.
A nearly 13 percent rise in global cotton production next year will barely keep pace with the rebound in demand for fibre, ensuring world cotton stocks remain tight through 2010/11, an international farm group said on June 2.
08 June, 2010 by admin