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'India cotton prices will crash' - Gujarat ginners

06
Mar '12
Indian raw cotton prices will crash and those in overseas markets will rise, is the general reaction of cotton traders and ginners based in Gujarat, which exports the highest amount of the white gold from the country.

Yesterday, the Indian government had banned the export of raw cotton with immediate effect, without assigning any reasons. It has also banned exports of those who have registered their export contracts but have still not shipped their goods.

“Cotton prices in India will crash and those in global markets will become stronger”, Mr Anand Popat – Secretary of Saurashtra Cotton Ginners Association told fibre2fashion.

“This decision will affect cotton farmers the most. As per my estimate, ginners are not carrying much inventories. It is the farmers who still have large volumes of unsold cotton”, said, Mr Paresh Valia of Asha Cotton Industries.

The immediate impact was felt on prices of Shankar-6 quality of raw cotton and the highest exported quality of cotton from India.

Prices of Shankar-6 crashed 4.93 percent from its previous day on March 5 to Rs 33,300 per candy (1 candy = 355 kg) following the announcement of the ban on cotton exports.

“In the new season, 12 million bales (1 bale = 170 kg) have already been registered for export, of which around 8.5 to 9 million bales have already been shipped. Secondly there are around 12 million and 5 million bales lying unsold with farmers and ginners, respectively, Mr Popat added.

“I also expect those who have already registered contracts, but have still not exported, to approach courts for redress”, Mr Popat informed.

Mr Paresh Valia is also of the opinion that the government should have at least allowed those holding contracts to export and should have stopped new registrations. Alternatively, they could have also given a time limit for permitting exports, rather than bringing the policy into effect immediately.

Fibre2fashion News Desk - India


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