Financial Daily from THE HINDU group of publications
Monday, Jun 13, 2005
Financial Daily from THE HINDU group of publications Monday, Jun 13, 2005 |
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Agri-Biz & Commodities
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Cotton Higher carry-over stock to put price pressure on cotton market G. Gurumurthy
Coimbatore , June 12 A likely higher carry-over of cotton into 2005-06 is expected to add price pressure on the kapas cotton market, in addition to the pressures of declining cotton-seed prices amidst huge crop realised this year. The raw cotton market is witnessing lack of movement with little buyer interest as many textile mills are replete with stocks that will see them comfortably through till the new season opens in October. The cotton trade circle here says the carry-over cotton stock this year will be one of the largest, at around 50 lakh bales, unlike the 25-lakh bales during the current 2004-05 season. The trade and industry account for a projected higher carry-over stock of 50 lakh bales is based on the current unsold stock of 30/32 lakh bales with the Maharashtra State Co-operative Cotton Growers Marketing Federation and another 10 lakh bales with the Cotton Corporation of India. The textile mills which account for an average 15 lakh bales of monthly consumption are believed to be holding two to three months stocks. According to sources, the private cotton trade is holding 10-12 lakh bales in stock. Even after adjusting the consumption by the mills between this month and August, the existing cotton stocks could get liquidated only partially, thus leaving a good quantum of cotton with the mills. The biggest worry for the ginners and cotton trade is the huge fall in the price of ginned cotton seed, thanks to the high cotton output. The huge cotton yield recorded this year has pushed down the price of ginned cotton-seed below Rs 600 a quintal from Rs 750/Rs 800 a few months ago. Normally, the cotton-seed component forms around 70 per cent and only the balance is from lint (ginned cotton).
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