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Cotton prices continued to decline on lack of demand from mills. Rates dropped by over Rs 3,000 a candy (356 kg each) this week to Rs 54,000-55,000.
In Rajkot, Gujarat Sankar-6 cotton on Friday traded at Rs 55,000 a candy, down by Rs 1,000 from Thursday's price. Raw cotton declined by Rs 10-15 to Rs 1,220-1,240 for a maund of 20 kg; it traded at Rs 1,250-1,260 at Kadi. About 45,000 bales (170 kg each) arrived in Gujarat and 1 lakh bales in the country as a whole.
A Rajkot-based broker, Mr Mayurbhai, said that limited buying by mills and a weaker international market led to cotton prices going down in the last couple of days.
Mr Arvindbhai Raichura of Balkrishna Ginning Mill said that millers are waiting for a further fall but as raw cotton price is high, the scope for going down steeply is limited. Price will decrease but it may not go below Rs 52,000-52,500 a candy.
According to traders, cotton prices will only drop only when raw cotton prices fall. But farmers are not expected to sell at a lower price. However, the overall sentiment favours a downside as the demand now is lower.
According to an industry body member, soaring cotton prices could shrink India's apparel exports by at least 15 per cent in volume terms this year, even as the demand from developed economies is still only limping back to recovery.
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