Commodity News Today- Gujarat Cotton price slump due to low demand
Appreciating rupee against dollar coupled with lower demand has pulled down Cotton price in Gujarat. The price of benchmark Shankar-6 Cotton variety has gone down by Rs 1400-1700 per candy. 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.
The export of Cotton has also slowed down after rupee started recovering against the dollar. Appreciation in the value of the rupee against the dollar makes export less competitive in the international market. Strong dollar allows exporters to offer Cotton at a competitive price in the international market as their realizations in rupee terms remains higher even after giving discounts.
Amid low demand, arrivals of Cotton in the local market, too, have slowed, around 40,000 bales (170kg) are arriving daily, which used to be 70,000-75,000 bales during the same time last year.
Gujarat is expecting 16% decline in Cotton output in 2018-19. According to trade estimates, despite an 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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