The Hindu Business Line : Cotton prices likely to rule firm on demand

COTTON prices are likely to rule firm in next few days on expectation of good buying for export in select cottons, reduced inflows and spread offerings by some ginners and stockists.

Select cotton prices such as V-797 Kalyan, Shankar-6, J-34, H-4 and Bengal Deshi have increased by about Rs 600/1,100 a candy (356.56 kg) over the past few days on firm buying by mills and exporters.

"Cotton V-797 Kalyan has seen exceptional interest from local mills as well as exporters who have driven the market up by at least Rs 700 per candy in the past 10 days," Mr Mitesh Shah of Kanam Cotton said.

"Buying in V-797 has really gained momentum from most of the spinners of North and South India. Ahmedabad-based mills and exporters are in the market for continued buying. Good export enquiry was also witnessed for further type (25+mm) cottons," Mr Shah said.

In V-797, exporters have once again lead the upsurge in the market - one big contract of 4,800 bales (1 bale = 175 kg) was done last Saturday by a Mumbai-based exporter who covered all the sellers on that day at Rs 16,300 a candy in Kadi (Gujarat), which has resulted in ginners being over booked and thus the upsurge in prices, he said. Arrivals are nearly over.

Some parts of Saurashtra in Gujarat, some parts in Maharashtra, Andhra Pradesh and MP are still witnessing meagre arrivals.

Arrivals in Gujarat were at 1,000 bales daily. Cumulative arrivals in Gujarat are being put at nearly 46 lakh bales. Arrivals in Maharashtra were being put at around 1,500 bales daily. Moderate buying was witnessed in Maharashtra owing to lower prices.

Total stocks on hand are expected to be around 11.25 lakh bales including Gujarat 3.5 lakh bales (Kalyan one lakh and Shankar 2.5 lakh bales), Maharahstra 5 lakh bales, Andhra Pradesh 1.5 lakh bales, Madhya Pradesh nearly 50,000 bales and others 75,000 bales.

For 28-mm cotton varieties and above, spinners who are not covered till September may either buy or adopt a wait and watch policy as the new crop is due by September even in Gujarat if the rains and weather are normal.