Cotton prices have started declining after a six-month rally. The Sankar -6 variety fell from Rs 63,000 a candy of 356 kg to Rs 53,000-54,000 on the spot market this month.

Gujarat Sankar -6 variety for super quality was traded at Rs 52,000-54,000 a candy on Thursday and the inferior one quoted Rs 45,000-50,000 a candy.

Kalyan was at Rs 36,000-40,000 a candy. Sankar -6 raw cotton was traded at Rs 1,200-1,240 for 20 kg. About 20,000-22,000 bales of cotton arrived in Gujarat and 65,000 in the rest of the country.

Out of the 31.2 million bales estimated by the Cotton Advisory Board, only 27.8 million bales arrived. Even stockists have started offloading cotton expecting further fall. Weak demand in the spot market has also pulled down the prices.

According to traders in Rajkot, the market is still hoping that the Government will allow cotton export.

Our Chennai Bureau reports : Cotton prices are dropping mainly since spinning mills are not buying. They are wary of building inventories at high prices.

The spinners' problem is that they are burdened with stocks of yarn and cannot afford to additionally build up cotton inventories.

Yarn stocks are stuck up because of problems mainly in the garment sector.

The Madras High Court's order to close dyeing units in Tiruppur is one of the main problems facing the garment sector.

Besides, the Finance Minister, Mr Pranab Mukherjee's announcement in the budget to levy a 10 per cent excise duty in the Budget has led to problems.

The garment sector, in protest against the proposal, has now and then struck work.

Though the lifting of curbs on yarn exports was expected to help, the spinning mills have not seen any immediate demand from abroad.

This is seen as the main problem in mills not buying and as a result, prices have come under pressure.

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