Raw cotton prices rise again, due to Pak duty on yarn export

Neighbouring country imposes 15% duty.

Raw cotton prices, after having eased substantially following government’s measures to arrest the rise in these, have again started moving up.

The government had put in place measures last month — new duties, suspension of registration of new export contracts, etc - to divert cotton from the export market to the domestic one and to bring down prices.

However, Pakistan has since imposed a 15 per cent duty on its cotton yarn exports. Which has made exports attractive again.

Chinese buyers, for one, major importers of cotton and yarn, are again turning to India. This has had another effect, of renewed buying by domestic mills for the export market, bidding up prices.

As a result, the price of the high quality Shankar-6 cotton, a benchmark variety grown in Gujarat, has touched Rs 29,000-29,200 a candy (356 kg), a rise of Rs 1,500-2,000 a candy.

“Cotton prices have surged in the range of Rs 500 to Rs 800 a candy since the last week. Gujarat saw prices rising by Rs 500 a candy, Punjab by Rs 600 a candy and Andhra Pradesh by Rs 500 to Rs 800 during the period,” said Arun Dalal, an Ahmedabad-based trader.

Cotton traders also see prices inching up as approximately 1.5 to 2 million bales (a bale is 170 kg) of new cotton crop is yet to arrive in the market.