Cotton was down on Friday, as demand dropped and arrivals increased. Demand from exporters and millers was poor too. Cheaper crop is arriving from Maharashtra and Andhra Pradesh even as demand has fallen has depressed prices in the State, said a trader.
The new A-grade Sankar-6 variety traded at Rs 33,800-33,900 a candy of 356 kg and B-grade at Rs 33,700-33,800 in Gujarat. The Kalyan variety was offered at Rs 27,000-27,500 a candy. About 55,000 bales of 170 kg each arrived in the State while 1.9 lakh bales arrived in the rest of the country. Mills and exporters bought around 8,000 bales from the State yesterday.
Kapas or raw cotton decreased by Rs 10 to Rs 830-865 for a maund of 20 kg here, while for delivery at Kadi was Rs 840-880.
Arrivals on December 31 declined by 11.74 per cent to 88.01 lakh bales against 99.7 lakh bales in the year-ago period. According to industry sources, lower crop in top grower Gujarat has pulled down arrivals. Reuters reports: China, the world’s biggest cotton consumer and importer, is studying a proposal to issue extra import quotas for textile mills which have been pushing the government to boost the amount of cheaper overseas cotton they can buy, industry sources said.
If approved, the quotas will require mills to buy three tonnes of cotton from state reserves for every tonne they import, said the sources who declined to be named as they were not authorised to talk to the media.
It is not clear if these imports quotas would be a duty free basis or on a sliding tariff system.
Any increase in imports from China could boost US cotton prices, as the US is the largest exporter of the fibre to China.