The Hindu Business Line : Forward trade begins in cotton; prices slip

Forward prices of select cotton varieties such as J-34 and Shankar-6 have declined by around Rs 20-25 a maund (37.32 kg each) in the last one week on steady increase in arrivals against limited but fresh buying interest from mills.

For mid-September deliveries, J-34 variety is being quoted at Rs 1,540 a maund at Abhor line and Rs 1,570 at Bhatinda line. For full September deliveries, J-34 is being quoted at Rs 1,525 at Abhor line and Rs 1,560 at Bhatinda line.

"Daily inflows in the North are around 500 bales. Total volume of trade has increased from 200 bales to 600 bales daily. Major buyers are local mills such as JCT and Winsome. Forward deals in Bengal Deshi are expected to start in another week," a local trader said.

Unsold stocks at the major centres are reported to be around 11,000 bales (170 kg each) including 3,000 bales in Punjab, 3,500 bales in Haryana and 4,500 bales in Rajasthan, trade sources said.

The Gujarat S-6 is being quoted at Rs 16,500 a candy (355.56 kg each) at Gondal centre for full November deliveries. Just a week ago, some deals for forward sale have been concluded at Rs 16,200 per candy for October deliveries, a trader said.

"As arrivals may gather strength in the next few days, markets in the North have started moving down and even in Gujarat, markets are ruling easy. Only small export deals are reported as American cotton market is also coming down," he said.

Fresh arrivals in Gujarat are expected to begin by September-end or first week of October.

"There are hardly any stocks left in good cotton now. It is only in S-6 that markets may remain steady to firm. Exporters are entering the markets for this variety as the rupee/dollar rate now favours exporters," a leading exporter said.

"Gujarat crop may surpass all expectations this time if there is one more round of rain in Saurashtra and North Gujarat region. This might delay the crop arrivals by a week or 10 days," Mr Mitesh Shah, a leading cotton trader said.

The cotton acreage in the country is reported to be the highest-ever and a bumper crop is expected. Most of the sowing in Gujarat is of the Bt variety. This season, even farmers in the North are reportedly happy with Bt debut in their region.

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