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Hopes of cotton exports revive on back of fall in prices

05 Jan '09
2 min read

When the MSP of cotton was increased in the new and ongoing cotton season, prices of cotton quoted in the Indian markets were much higher than those prevailing in the international markets, which had led to a slowdown in exports of cotton which had hit an all time high figure in the last season.

But, now the trend seems to be reversing and prices have fallen by as much as Rs 1,000 per candy (1 candy = 340 kg) in the last few days which has renewed the hopes of cotton exporters. Though off course, the current Indian prices of good quality cotton are still quoting higher than global prices of similar quality.

Exporters are waiting for the prices to go down still further which is expected to bring stimulus in exports of the white gold. Despite the falling prices, the Indian textile mills have still not started their annual purchases on a large scale as yet and are adopting a wait and watch attitude in anticipation of prices falling further.

Commenting on the export potential of cotton, Mr. Nirav Sejpal, Director, Bajrang Cotgin Pvt Ltd., Rajkot said, “At present there is no hope for exports, since cotton prices have dipped by just Rs 1,000 per candy in the last few days of the Shankar-6 variety of cotton which is quoting at Rs 21,500 per candy. Secondly, the demand is low in international markets and the price difference for the same quality of American cotton is 5 cents per pound”.

We also spoke to Mr. Hitesh Sata, Owner, Swastik International again in Rajkot, for his opinion. He said, “Yes, prices have come down. But, presently, USA & Brazil are exporting at lower rates and the importing countries are Taiwan & China. Quality of USA's Emote cotton is just a bit lower than our Shankar-6 variety but is cheaper by 5-6 cents per pound in comparison to the Indian variety, but I cannot predict whether prices will fall further in future.”

“Our prices have to be at par or even lesser to compete in global markets”, he added by saying. According to experts, prices will go down only and only when the Cotton Corporation of India stops purchasing cotton from the open markets at the predetermined prices. Currently CCI is lifting around 65,000-70,000 bales of cotton daily.

Fibre2fashion News Desk - India

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