Cotton Prices Rise, Cloth Activity Slow

With declining supplies, cotton prices were on the rise at the Mumbai cotton market last week. According to reports, more than 90 per cent of the crop had already been marketed. Hence, the limited supplies now would be offered at higher prices. Most of the stocks are held by the prosperous farmers or traders. They would part with the only supplies if they get higher prices.

The inflow in Punjab was one-half of that in the previous week with arrivals nearly touching 2,500 bales a day. At the same time, with rainfall in many parts of Gujarat, Madhya Pradesh and the South, the inflow was poor. On the other hand, good export of cotton cloth and yarn helped sustain the demand from the organised sector, as well as the powerlooms. At present, the only bulk supplier is the Maharashtra Federation having sizeable unsold stocks of more than 15 lakh bales.

 

Even in Gujarat, the inflow of shankar-four and Co2 were on the decline. The receipts reported were of inferior varieties. The mills had to pay high prices for choice quality shankar-four, quoted firm at Rs 20,000-21,000 per candy. At the same time, with the fall in receipts, kalyan, waghad and kala had been in demand at slightly higher levels.

However, compared with last season, still shankar-four extraquality was available Rs 200-250 lower per candy. Demand from exporters were well below expectations and out of tune with the quota announcements.

There is little possibility of a bullish trend in the international cotton market due to the comfortable supply position. Punjab saw gin was in demand Rs 15-20 higher at Rs 1600/1800 and F-414 at Rs 1900/1930 per Bengal maund.

Gujarat shankar-four inferior fetched Rs 16,500-17,500 and superior was quoted at Rs 18,500-20,500 per candy. Kala was demanded Rs 200 higher at Rs 12,250 and Kalyan moved up to Rs 13,500-14,000 per candy. While, the inflow was on the decline, demand from mills would continue as they had very limited inventory.

Cloth: The expectation of good demand was not met over the last week when activity slowed down on the Mulji Jetha cloth market in Mumbai. However, reports from upcountry centres were encouraging. There is hope for good upcountry buying in the coming days as most of the traders were been able to reduce stocks. They also had to gear up for seasonal buying till June 15. The demand here had slowed down as upcountry traders from Gujarat, Maharashtra, Madhya Pradesh and the South were unable to leave due to unseasonal rainfall at the various centres. Inclement weather affected retail demand too.

Reports from upcountry centres like Delhi, Ujjain, Calcutta and Indore indicated good buying due to the ensuing marriage season. Cotton, silk, polyester sarees, suitings and shirtings showed demand. At the same time, many upcountry centres indicated demand for school uniform.

However, MP traders were at a loss, because of the change in the uniform colours announced in the state.

This would place many traders in difficulties.

Demand for summer fine and super-fine cotton varieties had been satisfactory. Calcutta reported moderate demand for these varieties.

But, city traders were disappointed by the poor demand at the