Cotton Dull, Cloth Trade Falls Afresh

The Mumbai cotton market lacked activity last week as mills refrained from entering into fresh commitments at this juncture. stockists preferred to dispose off stocks with the start of the monsoon, which in the long run affects the cotton quality due to moisture.

The inflow in Punjab was at a standstill, but stockists still hold unsold stocks to offer. Earlier, they were disinclined to sell at lower levels. But, the sentiment later changed and prices declined by Rs 20 per Bengal maund over the past week. The fall in Gujarat varieties continued with further decline in prices to the extent of Rs 200-250 per candy. Due to sluggish demand, sellers were keen on liquidating stocks.

 

Traders and ginners preferred to clear the stocks to prepare for the next season starting September. However, in Gujarat, gins would start only in October on Dassera day.

On the export front,as the granting of further quota to the Maharashtra State Co-operative Cotton Growers' Marketing Federation wsa not yet finalised, traders had to look to other ways and means to clear the stocks at the end of the season.

It is estimated the federation would have to sell cotton at open market prices in the near future.

Mills were counting on these supplies as with the sale by the federation, prices on the open market would drop. In view of poor mill demand, the federation would find it difficult to clear the 10 lakh bale stocks.

Heavy rains in Gujarat have caused extensive damage to rail and road traffic. Sowing operation at farms has been washed out in many places. Naturally, Gujarat crop would be affected. However, it is too early to come to any conclusion as fresh opartions would be undertaken.

Punjab saw gin ruled at Rs 1,825-1,875 and S-44 at Rs 2,070-2,090 per Bengal maund. Gujarat Shankar-4 ruled easy at Rs 17,250-20,500 per candy. Kala gin fetched Rs 12,250-12,300 and Kalyan, Rs 13,800-14,200. The undertone was quiet and even at lower rates, demand was poor.

Cloth: Activity declined further on the Mumbai cloth market last week. The seasonal demand is already here with the result that summer-fine and super-fine cloth lacked enquiries.

Traders had to keep the stocks for longer periods. Buyers showed no interest even at lower prices. Besides, the demand for costly sarees, suitings and shirtings had dropped due to the end of the marriage season. Now, mills and traders would have to maintain the unsold stocks for at least two months.

Meanwhile, sellers were active in disposing off the stocks at lower rates.

Mills like Century Industry and Bombay Dyeing reported steep fall in profits. The Piramal Spinning and Weaving Mill has come out with better results, showing profit after seven years. On the total sale of Rs 79.65 crore, it has earned a net profit of Rs 23 lakh.

Besides, it has been undertaking modernisation programme at the cost of Rs 28 crore.

On the other hand, the Board for Industrial and Financial Reconstruction (BIFR) has announced that Calico Mill would have to be liquidated as the scheme presented by a party was not approved by ICICI.

Meanwhile, the Maharashtra government has granted permission to Great Eastern and Modern mills to develop the excess land with them. Earlier, such permission was granted to Khatau mill.

Now, other public and private sector mills are awaiting the policy decision about the excess mill land. The chief minister had promised a decision within a month. It will pave way for mills' modernisation with the money avvailable from the sale of excess land. Even the public sector mills will benefit by the decision.

Meanwhile, reports from upcountry centres like Rajasthan and MP say there is moderate demand for school uniform, suitings and shirtings.

Bhilwara reports indicated poor demand for suitings. Prices of grey were mixed. They dropped by Rs 15-20p per metre in Icchalkaranji, but rose in Surat at Rs 10.50-12 per metre.