Decline In Cotton Prices Arrested
A modest improvement in prices had been witnessed in the Mumbai cotton market last week. The Union government's policy of providing remunerative prices to farmers, market intervention purchases by the Cotton Corporation of India and demand from exporters, all resulted in arresting the further decline in prices in the cotton market. However, the recovery was slow and in the absence of brisk demand from mills it would be difficult to further push up the prices. It was with an eye on elections in Punjab that the Cotton Corporation of India had been buying actively from Punjab. According to trade sources, even the CCI had been purchasing shankar-four in Gujarat and other qualities from Madhya Pradesh. At the same time, cotton growers in Andhra Pradesh were agitating. According to them, the estimate of the crop by the Cotton Advisory Board at 155 lakh bales had been very conservative and taken in favour of the mill industry. The crop will not be less than 165 lakh bales, they feel. They had been demanding remunerative prices to cotton growers and sought a further release for export.
Looking at the fact that the mills have been still buying small quantities of cotton for immediate requirements in the circumstances of shortage indicated that the crop would be more than the CAB estimate and the supply position would be favourable. According to trade, about 35 lakh bales had already arrived in the markets. The pace of inflow had been very good and the fact that despite low prices farmers had to dispel of the stocks indicated that the supplies would be more. Even in Gujarat `mandis' were full of cotton and more supplies had been stopped. In case of superior cotton, mills had been talking of a shortage and imports while supplies had been piling up in Gujarat as well as in the south.
Cloth: Traders in the Milji Jetha cloth market were out of their exhibition slumber and are now concentrating on the sales in the Mumbai cloth market. However, the closure of the market on Monday and Thursday hampered trading activity. Despite two exhibitions in the city in a very short duration, the trading activity had not been benefitted to the extent expected. Now traders are banking on the start of the buying season from January 15 onwards. The marriage season would continue till June and the demand for sarees, costly suiting and shirting's would be expected to be brisk during the period either in the city or at upcountry trading centres.
At the same time demand for summer fine and superfine qualities like cambric, mulls and voiles would start. Garment manufaurers had been in the market for the requirement of the season ahead. They had already started purchasing on the basis of forward delivery. At the same time sales of school uniform suiting and shirting varieties had also picked due to demand from ready-made garment manufacturers. However, the demand for mill varieties had been slow, purchases of shirting's bleached and coloured by the powerloom sector had been fairly satisfactory.