Cotton Prices On The Rise

A modest rise in cotton prices was witnessed last week at the Mumbai cotton market. Sources said that more than 150 lakh bales had already been sold, while only 15 lakh bales remained.

However, mills had very limited inventory and this was attributed to poor cotton cloth demand and an acute shortage of funds. With the end of the financial year, traders anticipate a liberal money market in the coming days. This is expected to help boost the smooth working of mills.

Most of the stocks are with the Maharashtra State Co-operative Cotton Growers' Marketing Federation.

The stocks are estimated at between 12 lakh to 13 lakh bales. The federation had procured about 28.5 lakh bales, while only about 16 lakh bales were sold. This was despite offers of special discounts to bulk buyers. With the changing sentiment in the market, the federation has announced an increase in rates of different varieties from Rs 200 to Rs 400 per quintal.

It is still doubtful whether the federation would be able to reduce losses, which amounted to Rs 500 crore last season. Marginal mills would have to approach the body to get their supply of cotton during the lean months ahead.

Despite the large export quota, hardly one-sixth of the same has been despatched so far.