Cotton was traded between $2.10 and $2.15 per pound last week, the importers said. Though the price came down to $1.78 at the New York Futures trading yesterday, it is on an upward curve, they said.
The cotton prices started spiralling since 2008. Before 2008, the cotton prices ranged between 60 cents and 70 cents per pound for a period of more than 15 years.
"Just one year ago, cotton was trading at 70 cents a pound," said Money Morning, an investment research organisation based in the US. Now it is trading at roughly $2 a pound, said the organisation.
"China imported 390,720 tonnes of cotton last month. That's 31 percent more than a year earlier," Money Morning said. "Global cotton supplies are not keeping pace with China's growing appetite."
A senior official of the local DBL Group, one of the major importers, said even last Thursday cotton was quoted at $1.95 per pound.
The official said traders of West African countries, a major hub of cotton, are either delaying shipment or cancelling the contracts for civil wars in that region.
"Moreover, India, the second largest cotton producer worldwide, has again slapped a ban on cotton export since January," the official said, requesting not to be named.
All these factors contributed to the rise in prices on the international market, the official said.
"I don't see any price improvement in the next four to five months," said Abdullah Al Mahmud, managing director of Mahin Group.
A Matin Chowdhury, a leading cotton importer, also said the production shortfall following natural calamities in cotton growing countries such as Pakistan and Australia, speculative buying by China and a surge in demand in garment producing countries are responsible for the price hike of cotton worldwide.
Probir Kumar Saha, another cotton importer, said India is a major source of cotton for Bangladesh. "But we are not getting cotton from India following the government ban on export of the commodity there," he said.
"We can hardly predict the future prices of cotton until the next crop is harvested in the November-December period. The prices are declining slightly, but it is difficult to predict to what extent the price will fall," said Jahangir Alamin, president of Bangladesh Textile Mills Association.
He said the internal consumption of cotton in India also increased significantly due to the rising demand of the item from the garment makers and primary textile markers there. The ultimate sufferers would be the consumers, he said.
"There is no possibility of the cotton prices getting any more stable this year as its demand has increased worldwide," said Mohammad Ayub, president of Bangladesh Cotton Association.
News Source: The Daily Star, Sun, 17/04/2011
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