The Hindu Business Line : Cotton prices may rule easy

COTTON prices are expected to rule easy in the next few days, looking to limited buying interest from mills coupled with steady inflow of fresh arrivals.

Harvesting is going on fine with most experts predicting the arrivals to prolong till May , trade sources said.

The local market trend was steady to easy during the last couple of days with most of the buyers adopting a wait and watch policy and a majority of sellers were keen to sell at higher rates for good quality, they said.

"The mood in the market is lethargic owing to almost no buying interest for a pretty long time. Sellers are keen on selling the current arrivals of ready bales," Mr Mitesh Shah of Kanam Cotton, a Gujarat-based broker, said.

"Ginning will continue for at least two-and-half months in Gujarat," Mr Shah said.

Export buying for Shanker variety is out. In fact, exporters have turned sellers in the domestic market. In V-797 variety, some export contracts were reported last week.

"This season, cotton trade has made an excellent use of export opportunity. Export estimate is placed at seven lakh bales (each of 175 kg), of which about 3.75 lakh bales have already been shipped till January-end," Mr Samir Shah, partner of Bhaidas Cursondas & Co, said.

Two major factors contributing to lack of fresh buying are yarn prices (which have decreased by almost Rs 15-16 a kg) and financial crunch (which is being already witnessed). It is anticipated to be even more severe by the end of the coming month, Mr Mitesh Shah said.

Most of the areas in Gujarat have received on an average more than 75 per cent of the crop and the arrivals are being put approximately at 33.5 lakh bales equivalent and pressing at 30.5 lakh bales.