Cotton Prices Up, Cloth Market Dull

Prices moved up by Rs 200-250 per candy on the Mumbai cotton market last week.

However, the earlier firm trend was partially reversed as demand from mills dropped at higher levels.

At the same time, mills had been keen on lifting cotton in bulk from the Maharashtra State Co-operative Cotton Growers' Marketing Federation at a considerable discount and favourable credit facility.

The Federation is nourishing huge unsold stocks and had been in difficulty to clear stocks on hand.

Even the Federation is having more than three lakh bales of old cotton stock which had been offred at a discount of Rs 1,000-Rs 1,100.

 

Consequently, mills would be assured of the supply from the Federation as and when necessary.

The inflow in Punjab had been on the decline as more than 65 per cent of the crop already been marketed.

Besides, according to trade circles, the Gujarat coarse and medium count cotton varieties had been in short supply. Prices of Gujarat kala and waghad had been on the rise in line with that of Punjab.

The inflow in Punjab dropped to 15,000 bales. Receipts would further drop in coming days. At the same time, supplies in Gujarat and MP had been modest.

Mills preferred Punjab cotton, but now with the rising prices, the demand for Gujarat and MP varieties had been on the rise.

However, the rising trend was arrested as mills had been lifting cotton from the Federation who reportedly, sold one lakh bales of new season cotton and more than 25,000 bales of old season cotton, offering heavy discounts.

Thus mills are assured of supplies from the Federation at concessional rates as well as favourable credit and other facilities.

On export front, more than one lakh bales had been cleared by the textile commissioner against the export quota.

Traders, exporters and the Maharashtra Federation are clamouring for further export quota. It would be announced at the time of the Export-Import policy announcement, according to trading circles.

Punjab saw gin was demanded Rs 20 higher at Rs 1,500-1,660.

Cloth: Despite the passing over of the budget proposals, no fresh activity had yet commenced on the Mumbai Mulji Jetha cloth market last week. Mills and traders are still nourishing large stocks, awaiting start of brisk buying for summer fine and super fine cotton as well as polyester varieties.

At the same time upcountry reports indicated slowdown in demand due to various reasons including law and order situation in Bihar, UP and now in Gujarat.

Conseq-uently traders were unwilling to build up inventory and preferred to dispose off the stocks on hand .

Another factor that had adversely affected the turnover was the year end.

Traders were keen to load the stocks and settle dues of loans and interest as well as make payments of advance income tax dues.

In the circumstances fresh purchases by traders had been ruled out at least till the end of March.

Upcountry traders would be hoping for brisk demand in April due tom the marriage season.

The reports indicated poor demand even at low levels as well as semi-wholesale levels.

The demand form Calcutta had been weak as fresh orders form Bangladesh and Assam had been poor.

According to reports in the market, many group mills and export-predominant units were large inventory with them and despite the year-end, were unable to clear stocks.

This had adversely affected the financial position and earnings to a large extent.

In case of Khatau mills, salaries ahd been hardly made. If the situation continues for long, it will take toll of many units in the country.