The Hindu Business Line : Cotton likely to rule firm in near term

COTTON prices in the domestic market are expected to rule firm in the near term, thanks to sustained demand from leading cotton millers and exporters, while the domestic arrivals are touching one lakh bales daily, according to trade sources.

"Due to good export demand in Shanker cotton, prices are edging up daily. From short stapled cottons like Kalyan and Y-1 to medium stapled cottons like LRA or long stapled cottons like Bunny, Brahma and Shanker to extra-long stapled cottons like MCU-5 and DCH, all are in very good local demand," said Mr Rajesh Chandrani, manager of a leading export house.

"With low imports and high exports prospects, cotton prices have only one way to go and that is a steep climb. We can see a rise of anything between Rs 1,000 to Rs 2,000 per candy in the next few days," he added.

"The cotton season 2003-04 started with a low carry-over, higher usage, lower imports, much larger exports, but a bumper cotton crop. The size of the crop that is providing a stabilising effect; every other factor is highly bullish.

"Domestic mills are aggressive buyers now and a hefty price rise is very much on the cards now. Ginners are not carrying any stocks and it is only in northern markets that one observes some hoarding by ginners."

"The cotton market in Gujarat is steady to firm right now. Buying from all over the country kept the market firm even while arrivals are peaking at an average 25,000 bales per day; Monday's arrivals are being put at 29,000 bales. Local mills are covering good amounts of all qualities at current levels now," said Mr Mitesh Shah of Kanam Cotton Brokers.

Total crop estimate in Gujarat is still close to 40 lakh bales. Total arrivals as on Monday have been put at 20 lakh bales and pressing at 17 lakh bales.

Saurashtra is accounting for the major share with arrivals at 8.5 lakh bales and pressing at 7.25 lakh bales. Main line pressing was being estimated at 1.7 lakh bales, he said.

Export contracts estimates are close to 2.5 lakh bales from Gujarat alone till date, with over 1.75 lakh bales dispatched, Mr Shah added.