Cotton markets in Gujarat are witnessing low demand following a slowdown in international cotton trading.
Giving details on the possible impact of the downfall in international cotton markets, Kishore Shah secretary, Central Gujarat Cotton Dealers Association, informed that in the international markets cotton prices are down by 3 cent per pound, resulting in a fall of Rs 2,000 per bale in the domestic market. In the wake of the current unrest in international markets, Shah informed that cotton exports have almost come to a stand still, while on the domestic front too, the demand is sluggish.
“It is true that the demand is low but on the other hand the arrival is also seen to be slowing down gradually,” he said.
If, in the international markets, the present situation continues to prevail for a longer period, there is a possibility of the forward contracts for African Cotton to take place in India, Shah hinted, adding that given the fact that the import duty on African Cotton has been removed by the central government, if the present pessimistic environment continues to prevail in the international market, then there are chances of forward contracts taking place for African Cotton for July, August, and September.
Presently, in the domestic markets the highest prices of cotton stood at Rs 24,500 to Rs 24,700 per bale. The Cotton Advisory Board, in a recently held meeting, estimated the total production of cotton to be around 315 lakh bales of which 115 lakh bales would be produced in Gujarat alone. However, as per their estimates, the exports of cotton would be around 85 lakh bales.