At Rs 58k-Plus, Cotton Prices Hurt Exports

AHMEDABAD: Prices of Indian cotton have seen a sharp increase in Feb due to less crop arrival and high demand, having reached Rs 58,000 per candy (356kg) from Rs 55,000 during the month. International cotton prices have also seen an increase. However, experts believe that higher cotton prices are affecting exports competitiveness. On Feb 1, the price of cotton was Rs 55,350 per candy and reached Rs 58,650 on Feb 26. -

February 27, 2024 “Overall fluctuations were influenced by factors such as market demand, supply dynamics and external conditions. The arrival of Indian physical cotton has slowed to approximately 1,50,000 bales per day, with Gujarat contributing 42,000 bales daily,” said a report by GujCot association. “There has been improved demand in the textile market in the last two months after dull demand for almost a year. Globally, cotton prices improved during Feb and the trend is expected to continue with the possibility of further uptick,” said sources.
Spinning units in the state are experiencing difficulties in maintaining profitability due to increased cotton prices. Jayesh Patel, senior vice president, Spinners’ Association Gujarat (SAG) said, “There has been a good demand for exports since cotton prices were stable at around Rs 55,000 per candy level for almost two months. However, recent increase in prices has again affected our export competitiveness. Cotton yarn prices have increased from Rs 235 per kilo to Rs 255 a kilo in Feb, but it has made Indian cotton costlier again in the international market. Currently, new exports orders are available at around Rs 253 per kg including all costs like transportation, clearing, forwarding to send goods to the port of the buyer country. Even after considering govt incentives for exports, it remains unviable for exports. Domestic demand has been good in the last few months but the increase of Rs 20 per kg in yarn prices has slowed that down ,too.”

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