The prices ruled firm on the Mumbai cotton market last week with the supplies drying up at most of the producing centres. However, mills and trade circles are optimistic for the coming season. With the rains at the producing centres coming handy, the sentiment could be conducive for the coming season.
The cotton output in Pakistan is slated to be higher and thus the both India and Pakistan would be exporting cotton to other parts of the world. In view of the falling demand and arrivals prices have been ruling higher.
However, the expectation of the Maharashta Co-operative Cotton Growers' Marketing Federation of further export quota has not yet been fulfilled. It was indicated that the Federation is still holding on to the unsold stocks of more than 6.5 lakh to 7 lakh bales. Recently the federation sold 75,000 bales to a Gujarat mill.
In view of their bad financial position, even though the mills have been lifting cotton from the traders they have been delaying payments for long periods, thus there has been a large amount of outstanding payments. The traders, who have themselves been facing a financial crunch, have not been able to perform normally in the market. This is the case with most of the traders.
Even prominent units in Mumbai have yet to clear outstandings of about Rs 12 crores. A south Indian mill unit has to clear around Rs 22 crores.
Traders fear that these mills with oustandings and incurring losses will be declared as sick units.
This is also the fear of the banks and financial institutions. Besides, the federation has to yet receive payments of about Rs 123 crores from mills, mainly the National Textile Corporation .
The fresh rains have brightened outlook for the next season and there are hopes of a 10 per cent increase in cotton output. Besides, a trade estimate has now placed carry-forward stocks at around 18 lakh bales. The prices have been ruling firm by Rs 200-Rs 250 per candy. Punjab saw gin was demanded higher at Rs 1,850-1,925 and F-414 at Rs 2,080-2,125 per Bengal maund.
Gujarat kala was in demand at Rs 2,700, Wagad at Rs 13,300-Rs 13,500 and Kalyan at Rs 15,250-15,500 per candy. Shankar-4 was demanded between Rs 18,500-Rs 22,000. Reports from Madhya Pradesh indicated early arrivals of new crop. The Coimbatore Cotton Association has already announced permission for trading in non-transferable specific delivery contracts in Punjab and some of the varieties grown in Rajashtan and other North Indian states.
Cloth: Despite the festival season the demand in the Mumbai Mulji Jetha cloth market remained limited last week.
Expectations of good demand for sarees, suitings and shirtings have failed, hence traders are faced with an accumulation of these varieties. Reports from upcountry centres were also discouraging.
The demand for summer-fine and super-fine clothing as well as the polyester varieties have been saturated.
The traders are now expecting a demand for bedsheets, tapestry and furnishing cloth for the Dussera festivals. Presently, the demand for costly poplins lacked buying support . In view of the hot season the demand for woollen varieties were negligible. Even upcountry centres lacked good buying support.
