By admin       2018-11-27

AHMEDABAD: Lower demand coupled with an appreciating rupee against dollar has pulled down cotton prices in Gujarat. The price of benchmark Shankar-6 cotton variety has gone down by Rs 1,400-1,700 per candy since last Thursday, say market players. Shankar-6 cotton price has corrected by 3-4% from Rs 45,500-45,800 per candy (one candy weighs 356 kg) to Rs 43,800-44,400 a candy within a week.Market sources say that lackluster demand and the fact of Indian exporters losing competitiveness due to the appreciating rupee has brought down cotton prices in the local markets. “Overall, the demand for the natural fibre has weakened as there are fewer buyers in the market. Even the yarn market is bad and demand in the international market is also not encouraging,” said Arun Dalal, a city-based cotton trader. The exports of cotton have also slowed down after rupee started recovering against the dollar. “Appreciation in the value of the rupee against the dollar makes our exports less competitive in the international market. Strong dollar allows our exporters offer cotton at competitive prices in the international market as their realisations in rupee terms remain higher even after giving some discounts,” explained another cotton trader.“The rupee has strengthened against the dollar recently and this has affected our export competitiveness,” Dalal added.Amid low demand, arrival of cotton in local markets, too, have slowed. “Around 40,000 bales (170 kg) are arriving daily, which used to be 70,000 to 75,000 bales during the same time last year,” Dalal said.Gujarat is expecting 16% decline in cotton output in 2018-19. According to trade estimates, despite increase in area under cotton cultivation, the production is expected to drop to 88 lakh bales from the 105 lakh bales produced in 2017-18.

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