Financial Daily from THE HINDU group of publications
Tuesday, Jan 01, 2002
Money & Banking
Agri-Biz & Commodities
Industry & Economy
Agri-Biz & Commodities
Cotton market stuck in a year-end limbo
COIMBATORE, Dec. 31
DESPITE pick up in arrivals and relatively low prices, most of the terminal cotton markets remain lacklustre. The year-end limbo in cotton trade is largely attributed to restricted buying by the mills which are said to be indulging in a `wait and watch' of the international cotton situation this year.
``December will be the month normally when the cotton purchases by the mills will begin to soar. Unlike last year when the mills used to buy minimum three months cotton requirement, this time they are hesitant to cover that much stocks,'' market sources say.
Thanks to the Christmas/year-end holidays in Europe and other textile buying overseas markets, the textile trade remained inactive for the past 15 days and it will be so for another week or so, they say. The slowdown in the finished textile goods market has brought the hesitancy in the cotton market, as there has been not much activity in the grey cotton yarn market either.
The war cry has had some impact on border States producing cotton, such as Rajasthan/Punjab where, the market sources say, the farmers displayed anxiety to move their produce early to the market thereby increasing the pace of arrivals in the primary market. This has partly brought down the price sentiment.
Of the estimated 140 lakh bales or so for the current season, around 50 lakh bales of cotton are believed to have been moved into the market so far. In this, at least 25 lakh bales would have been delivered to the consumers, the sources say.
Quality of the cotton harvest so far has also received some adverse notice among the consumers who are wary on the fibre strength in the domestic cotton. The sources say that the cotton lots coming into market beyond the month of January are to be carefully screened for quality and the consideration on import of cotton may gain momentum by next month.
Right now, the worry for the spinners is on the lack of buying support for the cotton yarn in the market both in export and local sale. The limited operation in most of the weaving centres has unnerved the spinners.
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