New Delhi: Cotton prices are touching the sky this time due to fears of falling cotton production around the world. On the Multi Commodity Exchange (MCX), the prices of cotton are consistently above Rs 50,000. Cotton prices have jumped 14 percent so far in August 2022. Global cotton prices are expected to rise further after the US Department of Agriculture (USDA) reduced the US Cotton Production 2022 estimate from 12.01 million bales to 11.70 million bales this time.
According to a report by Moneycontrol, the fear of falling production has increased due to drought in America. Texas is expected to produce 29 lakh bales of cotton. Texas produced 7.7 million bales of cotton in 2021. If we talk about India, there has been a decrease in the carrying stock in the country as well. Not only this but the possibility of falling production of new crops is also being expressed due to many monsoon imbalances.
Effect of pink bollard
Like last time in Haryana and Punjab, this time also the havoc of pink bollworm is being seen on the cotton crop. Many districts of Haryana are affected by this. On the other hand, the cotton crop has been damaged in Gujarat, Maharashtra due to heavy rains. At the same time, due to less rain in some areas in North India, there was less sowing of the cotton crop, and due to timely rains, the standing crop has been damaged. All these factors are also supporting the price due to the possibility of a reduction in domestic cotton production.
Price is going up
If we look at the movement of cotton, in April there was a jump of 6 percent in cotton, while in May, there was a jump of 8 percent, and in June there was a jump of 4 percent. Although cotton saw a decline of 14 percent in July, it has gained 14 percent so far in August. The industry is troubled by the high prices of cotton. The spinning mill is forced to buy cotton despite the high price. Due to rising cotton prices, Milo is demanding that cotton should be removed from MCX.
