Cotton Firm, Low Demand For Cloth
The demand for cloth had been low on the Mumbai cloth market last week. Reports from upcountry centres reported limited purchases. Upcountry traders reported good stocks on hand and were keen on clearing the same. Under the circumstances, prices dropped and traders were offering lower prices, but purchases remained poor.
There was drastic price reduction in view of the low demand and traders were unable to dispose of the cheaper longcloth meant for election purposes.
The industry would have to compete with the imported yarn and cloth which have already touched the ports. In view of the crisis many countries like Korea and China are unloading cloth at low prices which the traders are buying up in large quantities. The demand for summer varieties like mulls, cambric and voiles have been very poor. Upcountry buyers were unwilling to go for fresh purchases and prefer to clear the stock on hand. At the same time, demand from garment manufacturers for school uniform varieties were also limited.
The demand for sarees, suiting and shirting have been below normal. The situation is not likely to improve soon as most of the festival demand has now ended.
Cotton: After a quiet start prices firmed up on the Mumbai cotton market last week. With the low cotton production, mills now plan to import cotton so that the domestic prices would remain at manageable levels.
At the same time mills have been asking the government to keep cotton prices under check. According to reports, the imported cotton would be comparatively cheaper and hence more imports would be in the offing.
Farmers are on expectations of higher prices at a later stage, holding on the stocks. Under the circumstances the inflow has been at a low ebb in Punjab where hardly 10,000 bales were arriving per day, against the normal of 20,000 bales in the past.
The firm trend in Punjab had helped prices for Gujarat and Madhya Pradesh varieties to rise in sympathy. Specially Shankar-4 and MECH varieties gained sizable ground/ Shankar-4 prices have been ruling near the high of the last season at around Rs 23,000 per candy. Good quality Shankar-4 was demanded at Rs 22,200 per candy. The Maharashtra Feder-ation announced further hike in prices of certain varieties while in one variety reduction had been announced. Punjab Bengal deshi firmed up from the early low of Rs 1,485-1,500 to Rs 1,525-1,555 per Bengal maund. Punjab saw gin was offered firm at Rs 2,025-2,075 and F-414 at Rs 2,175-2,200 per Bengal maund.
Gujarat Shankar-4 was up by Rs 400 at Rs 20,750-22,250 per candy. Gujarat 797 was offered at Rs 16,500. The demand was moderate in Punjab and Shankar-4 from mills. Mills have refrained from lifting cotton at higher levels.
In view of good demand for yarn on the export front, mills have to cover cotton against the same and hence purchases would continue. However, they are not in a position to build up inventory as in the past.