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Coronavirus hurts cotton, yarn and rajma trade

Tue Feb 11 2020

 

 

Cotton and yarn prices have fallen by 4 per cent while rajma prices have increased by 8 per cent in the past 10 days because of market uncertainty after the outbreak of coronavirus in China.

 

Prices are expected to remain volatile in the short term before a clear picture emerges, industry bodies and traders said. As per industry estimates, India annually imports 50 per cent of its rajma requirement from China. Also, 25 per cent of its annual export of cotton and cotton yarn is to China.

 

“There has been an 8 per cent increase in rajma prices at $1,100 a tonne in the global market due to no shipment from the Port of Dalian in China,” said Pradeep Kumar Runwal of Bherulal Radheshyam Bhandari, a rajma importer based out of Naya Bazaar in Delhi.

 

“The shutdown continues in China and 300 containers of 24 tonne for India are stuck up at the port. In the domestic market, prices will increase in a month’s times, once the cargo reaches India.”

 

Cotton yarn prices have fallen 3 per cent to 4 per cent to ₹185-200 per kg for export quality ‘30s carded yarn’ in the past 10 days, said exporters. Similarly, cotton prices have fallen 4 per cent to ₹39,500 per candy of 356 kg, they said. India’s total cotton yarn exports to China are 1,100 to 1,200 million kg out of a total production of 4,100 million kg.

 

“There has been a sentimental correction due the shutdown in China. We will get to know the real impact this week or by next week,” said Sanjay Jain, MD at TT Ltd.

 

Jain added that everyone was holding purchases as buyers expect prices to fall. “With exports to China stopped, we have not seen any increase in demand from Bangladesh and Vietnam. Everyone is waiting and watching the situation,” he said.

 

Mahesh Sharda, president at Indian Cotton Association, said the virus outbreak in China along with Chinese New Year holidays has disturbed the global markets for the next fortnight and they expect clarity on export orders only by mid-February.

 

Cotton shipments of over 300,000 bales of 170 kg each have been delayed in the past fortnight, said Sharda, adding that the effect of the coronavirus has been partial. However, if the virus is not contained, it will majorly influence cotton and yarn prices, he said.

 

“The markets are going to remain dull with weak demand from the biggest buyer in the world. Buyers in China have requested for delay in shipments,” said Sharda.

 

Source: https://economictimes.indiatimes.com

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