# India: Market Snapshot; Request to Drop Tariff on Imported Yarn

Author: Jim.Robinson
Published: 2012-09-06
Canonical URL: https://www.cottongrower.com/cotton-news/india-market-snapshot-request-to-drop-tariff-on-imported-yarn/

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In the past, pressure from textile manufacturers in India has moved government officials to ban the export of cotton, and now that same group is requesting that the national 10% tariff on imported yarn be dropped as well. That’s because the local cotton price has increased 3% to 5% in the last two months while yarn prices have increased 15% during that same period.

That increase has made Indian yarn less competitive than that offered by spinners in other countries, especially Pakistan, where costs are about 10% lower ($3.60/kg in India and $3.30/kg in Pakistan).

A brief snapshot of India’s cotton market is below (information provided by Raja P. Gokulgandhi of Pravinkumar Ramdas):

- Indian S6 cotton and Mech-1 (cotton originating in Maharashtra and Madhya Pradesh) are each trading at 90 cents/lb.
- For the country as a whole, seasonal rainfall through August was 12% below the seasonal norm (it was 14% beneath the average as of the week ending 22 August).
- The most recent estimate of current season cotton plantings is reported at 11.28 million hectares.
- Cotton prices were subdued because of the rains reported in most of cotton growing centers, including Gujarat.
- Mill demand has been low for imported cotton, but local cotton is still being traded in good quantities.
- Mills have bought Gujarat S6 cotton at 83.7 cents/lb to 84.8 cents/lb in the last 2-3 days, while MCU 5 traded at 93.5 cents/lb.
- The rains expected this week should be favorable to the cotton crop. Cotton prices are expected to ease steadily with little demand for exports.