A firm tendency prevailed on the Mumbai cotton market last week. However, activity slackened with the onset of the monsoon. With the higher record crop estimate and mills reluctant to make fresh purchases at higher levels, further rise was arrested. Punjab varities ruled firm as supplies dried up completely and no fresh inflow was noticed.
Stockists offered goods only at firm levels. Due to financial problems and likely decline in cotton cloth in the monsoon, mills lifted only small quantities for immediate consumption.
The only redeeming feature was of heavy cotton yarn export demand during January-April 1997.
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In view of brisk export demand, mills were releasing limited quantity to local markets resulting in firmness in cotton yarn prices. Cotton cloth demand was well below normal due to high prices, while polyester and synthetic cloth were offered at lower levels attracting more buyers. Under the circumstances, cotton consumption could be affected to some extent.
The Maharashtra State Co-operative Cotton Growers' Marketing Federation is still having stocks more than 10 lakh at the end-season.
The federation had hiked the prices for the third time by Rs 200-500 now. At the same time, the Union government had permitted the federation to export one lakh bales more. Even after fresh export quota of one lakh bales, traders anticipated a further one lakh bales quota to be given to the federation soon. This had little impact on the market prices as no fresh purchases were entertained from the market.
Punjab saw gin ruled at Rs 1,830-1,915 and F-414 at Rs 2,080-2,120 per Bengal maund. Gujarat cotton lacked such firmness and attracted buying only at slightly higher levels. Kala was traded at Rs 12,700-12,800, Waghad at Rs 13,250-13,500 and Kalyan at Rs 14,500-15,000 per candy.
Cloth: Activity came to a standstill during the last fortnight on the Mumbai cloth market due to strike by `gumastas'. The fear of strike resulted in loss of business as upcountry traders refrained from visiting the city for fresh purchases. At the same time despatches and receipts of cloth were stopped. Traders strongly resented the move for an indefinite strike. Manhandling of traders as well as stone-throwing incidents during a traders procession created bitter feelings.
However, with the virtual end of the season, fresh turnover was at a very low ebb. Traders felt that the demand season here had ended. Even retail demand for summer fine and super-fine varieties, costly sarees and suitings-shirtings for the marriage season dropped. The reopening of schools saw the demand for school uniform cloth being switched-over to ready-made shirts and pants. The turnover fell further. This trend would continue for the next two months.
Meanwhile upcountry reports from Rajashtan indicated modest demand for marriage season sarees, shirtings and suitings. In view of the late opening of schools in North India, the demand for school uniform varieties continued but to a small extent.
With the fall in demand in Delhi, prices declined. In Amritsar and Ludiana demand for cold season wollen items had started.
A sudden spurt in demand for dhoties and sarees were reported at Ichhalkaranji, resulting in acute shortage. According to traders about 25 truckloads of sarees and dhoties had left Ichalkaranji for Bihar. Total cost of the same was estimated at Rs. 120 crore. Coming at the end of the season these purchases had surprised powerloom producers who smelled a rat as they had been asked to stamp the powerloom products as made by handlooms. They felt that the move was to get the subsidy provided for handloom cloth. The move was considered to be a political one in view of the many scandels coming out in Bihar. The recent strike by weavers, however, ended with the settlement of the wage structure. Dombivli process houses still continued with their closure against the entry tax.