Duty exemption still not able to increase imports as higher rates curbs
The duty which was being imposed on the import of cotton, has been removed by the government a few days ago. But as expected, this does not seem to give any relief to spinners and textile mills. The reason behind this is the skyrocketing prices of cotton which is Rs. 90,000/- per candy.
There was a strong belief in the market that duty exemption would lead to higher imports of cotton, but this ultimately did not happen as international prices were still too high.
According to CAI, if the decision had come a few months earlier, global prices would have been under control.
There are more loss making spinning units which cannot afford such high price as the weavers will not pay them high price for the yarn. Another reason for the hike in rates is the crop stock with MNCs which is around 6 million bales and futures trading on platforms like MCX and NCDEX, says Saurin Parikh, President, Spinners Association of Gujarat (SAG). He urged the government to limit both the factors.
However, farmers have around 50 lakh bales and 7 to 8 lakh bales from Tamil Nadu and Karnataka will hit the market in early June, resulting in regulated supply chain, CAI President Atul Ganatra said.
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