By admin       2017-06-27

With just a few days to go for the Goods and Services Tax (GST) roll-out, textile mills have reduced cotton procurement to maintain minimum inventory. Traders estimate that cotton purchases have come down by more than 50% in recent times. "Cotton buying by mills has reduced noticeably as mills are preferring to keep minimum stock," said Nirav Patel of a city-based cotton export house. "The purchases are expected to remain low till things become clear after the GST is rolled out." Patel said that purchases from even exporters had declined as there is still confusion over whether exporters will get duty draw back on cotton purchased before June 30. According to estimates, on an average, 4.5 lakh bales are bought by mills every month. One bale weighs 170 kg. "Mills are buying only as much as they require," said Arun Dalal, a cotton trader from the city. Traders said that low procurement by mills has also brought down cotton prices in local markets. The prices of top quality Shaker-6 variety of cotton dipped to Rs 43,000 from Rs 44,000-44,500 per candy a few days back. Not just cotton, oilseeds such as groundnut and soyabean too have registered a decline in procurement. "Processors are maintaining low inventory as there is still no clarity on rebate on existing stocks," said BV Mehta, executive director, the Solvent Extractors Association of India.

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