Cotton Traders See Scope For Large Exports

Traders said they were hopeful the government would allow more cotton exports in the 1996/97 season (October-September) after an official assessement of demand and supply is made later this month.

The government had already authorised an export of 500,000 bales (one bale = 170 kgs) at the beginning of the season.

Traders estimate Indias 1996/97 cotton crop at 16 million bales, about the same as in the previous year, during which the government authorised an export of 1.59 million bales.

At least another million bales should be available for export in the current season, said a trader.

Traders have been pleading for free export of cotton against the backdrop of Indias liberalised economic polices but the government has ruled it out for the time being. This will mean that the government will keep authorising exports piecemeal, said another trader.

 

The Cotton Advisory Board (CAB), an official agency, is meeting in Mumbai on November 21 to assess demand and supply in the current season.

Traders estimate the availability of cotton in the current season at around 18.6 million bales, including 16 million from the new crop and a carryover of 2.6 million from the previous year. There should be enough cotton for export after meeting domestic consumption, said a trader.

Traders expect cotton prices to firm in anticipation of the governments authorisation for further exports. In the week to Thursday, cotton prices firmed in Mumbai after opening subdued.

In spot, Bengal-deshi rose Rs 50/70 to Rs 920/960 per maund (37.32 kg). Gujarat Sankar-4 (long-staple) initially dropped Rs 900/1,000 to Rs 18,500/19,500 but rose to Rs 19,000/20,500 per candy (355.56 kg). We expect some decision by the government on exports soon after the CAB meeting, said a broker.

Indian castorseed December delivery rose to Rs 1,094/1,095 from Rs 1,090/1,091 on fresh speculative buying, dealers said.

Short-covering by bear operators to book profit helped the price recovery but overall market sentiment remained subdued amid limited export interest, one dealer said. Groundnut oil fell from Rs 360 to Rs 356/357 per 10 kg on sustained new arrivals of 130/140 tonnes coupled with limited physical buying. In Rajkot, spot slid by Rs 5 to Rs 530 per 15 kg.

Silver opened lower on the back of a weak trend in the world market but renewed industrial enquiries trimmed early losses towards the close, dealers said.

Restricted arrivals also helped market to bounce back from the lower level, one dealer said.Silver was down Rs 35 per kg on Wednesday. Gold opened higher on scattered seasonal enquiries but slid towards the close amid in activity. Gold was down by Rs 5 per 10 grams on Wednesday.

Gold biscuits (116.50 grams) opened higher at Rs 60,100 per piece against the previous close of Rs 60,000 but slid later to conclude at Rs 60,000 each. Overall market sentiments remained subdued at the close amid limited seasonal buying despite approaching Diwali.