Cotton Price May Rise on Falling Production |
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According to International Cotton Advisory Committee (ICAC), world cotton
production during 2005-06 has been 24.66 million tonnes (MT) and consumtion
24.77 MT. What's more - same trend has been projected for 2006-07 and 2007-08
also - leading to a shortfall of nearly 1 MT in 2008. This may give rise to
higher price for cotton in coming days.
However, there is a big 'if' depending upon developments in China. China continues to be the main driver of world cotton market - ranking first in production, consumption and imports. A visible slowdown in China's purchases has been observed in recent past, which may lead to lower total exports and consequently downward pressure on prices. Lower demand from China is slowing down cotton exports from India. Trade now believes cotton shipments will fall considerably short of initial projected volume of 45-50 lakh bales in 2006-07. This can potentially have an impact on domestic prices, especially over the coming weeks as arrivals begin to peak. |
| December 5' 2006 |
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