Import duty cuts offered by governmet cools cotton prices off record highs

Cotton prices have been at 10-year highs in the international markets and all-time highs in the Indian markets. On Thursday, prices touched Rs 45,000 high here and since then there has been some profit-taking into the markets.

Markets are reacting to the kind of import duty cuts from the Indian government. Till now, 5 percent of Customs duty and 5 percent of taxes have been waived off until September 30 to ensure or allow cheaper cotton imports. That is the reason behind the correction in the Indian markets.

The global markets have also continued to see gains. China, which is the biggest exporter of yarn and cotton products, has seen exports declined by nearly 9 percent in March on a year-on-year basis. So, lower exports, lower supplies from India and the US, and the fact that the demand will continue to be quite strong are some of the factors that have been keeping the cotton prices on the higher side.