Cotton prices in Gujarat dip after import duty cut

The prices of Sankar-6, a long staple Bt cotton variety in Gujarat, on Thursday declined by Rs 200 to Rs 300 a candy. Marketmen in Gujarat see the possibility of prices coming further down by Rs 1,000 to Rs 1,500 a candy in days to come.

"The prices of Sanker-6 variety of cotton have fallen by Rs 200 to Rs 300 a candy to settle at Rs 27,500 to Rs 27,800 a candy in the wake of the import duty scrap. However, prices will not slip sharply as there is no ready stock in the market at present. Currently, a stock of only 300,000 bales is available in the market. New arrivals will start only after three months," said Kishor Shah, acting president of the Central Gujarat Cotton Dealers Association.

 

There are reports that some textile mills in southern India on Thursday struck import deals for 10,000 to 12,000 tonne of raw cotton. A few of the Gujarat-based mills have also started importing cotton, Dalal added.

The deals were stuck at Rs 26,500 to 27,000 a candy for mill delivery. While admitting that duty reduction will provide level playing field to textile companies, Kishor Shah opined that the cut in export duty will increase the import of cotton to India.

Cotton imports to India are pegged at 0.65 million bales in cotton year 2007-08 ending this September. Scrapping of duty might take our cotton imports up at 1.6 million bales.

Some of the players in Mumbai and south India carried out deals in Pakistan to import cotton from the neighbouring country.

These mills have booked containers of cotton from Pakistan at Rs 24,000 to Rs 24,500 a candy for port delivery. Now mills may look at Tanzania and South Africa for imports of cotton, said Manubhai Shah, owner of Manubhai Mangaldas & Co.