A steady trend persisted on the Mumbai cotton market last week.
With the decline in the inflow from Punjab and other producing centres, sellers were demanding higher prices. According to reports, the inflow in Punjab had dropped to below 1,500 bales, against 2,500 bales a week back.
However, the mills had been able to meet their immediate requirements due to poor demand for cotton cloth and the paucity of funds.
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It was reported that many mills in the city had been offering their workers voluntary retirement schemes in a bid to slash the wage bill. A group mill was reportedly paying two year's salary to staff members who were agreeing to the scheme and was hoping of retiring about 500 of its members. This is indicative of the financial position of the mills.
Meanwhile, the Maharashtra State Co-operative Cotton Growers Marketing Federation had hiked the prices of different varieties of cotton acquired during the current as well as previous seasons by Rs 200 to Rs 300.
The increased prices, however, lacked fresh buying support. Traders were of the view that the federation is still retaining unsold stock of cotton to the extent of 14-15 lakh bales.
Cotton production in Maharashtra is estimated to be about 50 lakh bales of which 33 lakh bales has been already procured by the federation. In view of the Maharashtra State Co-operative Cotton Growers Marketing Federation's policy of increasing prices, open market prices had been better and, in the circumstances, a major fall in prices would be ruled out.
In Gujarat cotton, supplies had been meagre in Shankar-four and that too of inferior quality which had been sold below Rs 16,500-17,000 per candy while extra superior varieties were demanded at prices as high as Rs 19,500-20,250 per candy. With firm prices of Punjab cotton, the demand for Kalyan had been good, which ruled higher at Rs 14,000-14,500, and Kala was up Rs 300 at Rs 12,500.
Punjab sawgin, after rising to Rs 1,600-1,700, eased to Rs 1,590-1,690 but recovered to firm levels of Rs 1640-1725 and F-414 ruled at Rs 1945-1960 per Bengal maund. The undertone was steady to firm, depending on the demand for mills.
Cloth: While demand at upcountry centres had been good, the turnover in the Mumbai cloth market dropped over the last week. It was reported that even retail demand had been poor and many stores had started shifting to school uniforms and rainy season equipment.
Traders were worried about the slack demand and felt that the seasonal demand had ended earlier than expected. Only a month back, the demand in both the retail and wholesale markets was satisfactory. Normally, during the busy season, the demand has been good for about three months. This was partly attributed to the sale of ready-made garments, and powerloom supplies at lower rates.
Reports from upcountry centres were still encouraging with very good demand reported for the manufacture of sarees, both cotton and polyester, suitings and shirtings.
The demand for summer-fine and super-fine varieties was good in Gujarat. Trading in Delhi had been suspended due to strike. Ujjain, Indore and Calcutta reported good demand for fine and super-fine varieties, sarees and suitings. The demand for school uniform varieties had been below normal.
Reports at the week-end indicated that upcountry traders were keen on liquidating their stocks, even at lower prices, expecting the season to end by June.
It is thus felt that upcountry traders would not go in for fresh purchases as the demand is likely to gradually decline towards the end of June.
In view of the good demand for sarees at upcountry centres, prices had been quoted a rupee higher, at Rs 2 per metre.
Many mills in the city have been reconstructing their activity with considering voluntary retirement schemes to reduce the financial burden. Even a leading group local mill had offered the benefits for staff preferring voluntary retirement. Another prominent mill had been unable to make payments to its staff and the workers had `gheraoed' the mill.