Indian Growers Hold Cotton for Better Prices

Posted by Matt Hopkins|29 March 2011

Despite near-record-high prices for cotton, many Indian growers are holding onto their stocks due to hopes that prices will spiral upward even further. According to an article published March 24 by The Business Standard, cotton hoarding has driven the spot market to an all-time high of $1.75/lb but hasn’t yet affected the futures market.

Sources say that as many as 5 million bales (170 kg)–enough to keep Indian mills running for two months–are being held by growers and stock hoarders, and they might continue to hold them until June or later. Ginners and mills are thought to be holding an equal amount as a hedge against future price risks, but are expected to start buying again in the second half of the year.

Textile mills, however, might continue to keep their current stocks in reserve and import cotton for the time being, especially since Indian officials have lifted the taxes on imported cotton.

See more stories about cotton such as this one click here.