Three lakh bales of cotton soon to arrive India post the duty removal announcement.
Immediately after the government declared the duty free import of cotton, some of large mills have ordered around 3 lakh bales. Each bale is 170 kg and will probably arrive India by mid-June from US. The mill owners have bought mainly the short staple cotton which is 27.5 mm length.
As per the sources, the deals were closed at Rs. 89,000/- per candy (356 kg each FOB). Commonly, Indian cotton industries consume medium staple cotton which measures 28.5 mm length. Short staple cotton can be used in similar ways when blended with medium staple cotton.
Although, as of now it is uncertain that whether the import deals proves beneficial financially for mill owners or not because we are unaware of the Indian market in mid-June, but at the same time the import has surely brought availability of crop to the market.
Traders also asserts that the decision is good and welcomed, however delayed. If it had come earlier say in February, industrialists must have imported approximately 40 lakh bales. But it came in mid-April which couldn’t fulfil the shortfall in domestic market. Now, the estimated arrival is merely 10-12 lakh bales by September current year.
Nevertheless, mills are importing cotton just to regulate the chain and supply. Also, on the flip side thin demands from weaving and garment industry doesn’t allow spinners to import expensive cotton.
