The Hindu Business Line : Cotton prices bearish on higher arrivals, lower mill buying

Price range
Domestic cotton remained easy.
Fine, medium staple cotton ruled lower by Rs 300-500 a candy.
Good quality DCH-32 quoted at Rs 38,000-38,500; average quality fetched Rs 30,000-31,000.
Sankar-6 fell to Rs 17,200/17,600 against Rs 17,800 previously.

Coimbatore , May 21

The daily arrivals of cotton into the market continued to remain higher unlike in the previous seasons even as the prices remained subdued amidst sluggish buying activity, local cotton trade sources said.

Despite being the fag-end of the cotton season, the daily arrivals this month so far works out at about two lakh bales which is unusual at this point of time, said Mr Ramani, Joint Secretary of the South India Cotton Association (SICA).

According to him, this phenomenon of continuous trickle of cotton at higher levels during the month of May indicates that the overall size of cotton output this year (2005-06) would touch 250 bales.

Lack of support

The general subdued price behaviour seen in the cotton market for the past two weeks is partly on account of the lack of support from cotton yarn markets and the general downtrend in the global cotton markets. The domestic cotton prices too remained easy and the fine and medium staple cotton prices ruled lower by Rs 300-500 per candy. The good quality DCH-32 were quoting around Rs 38,000-Rs 38,500, while average quality fetched a price band of Rs 30,000/Rs 31,000 a candy. In the case of Sankar-6, the price quote was lower at Rs 17,200/17,600 as against previous week's Rs 17,800.

The country's cotton exports are expected to touch 35 lakh bales (of 170 kg) this year and the prominent varieties being exported are Shankar-6, J-34 and MCU-5. China has emerged as the principal export destination, accounting for 70 per cent of the total cotton exports, followed by Bangladesh and the Far Eastern countries. A fall in the consumption of extra long staple cotton has also toned down its prices in the past two weeks.