The Hindu Business Line : Cotton spurts on increased buying

The cotton trade circles here said that the prices of all major varieties in demand have moved up by Rs 700-1,000 per candy in the last one week fuelled by speculation on a higher consumption demand perch. The cotton crop moving toward the season's final lap is also said to be the reason for the anxious mill purchases.

The Sankar-4 variety, which sold last week at Rs 23,000-23,500, went up on Monday to Rs 24,000-24,500 and the 797 variety has moved up to Rs 16,800-17,000 price band from last week's Rs 15,800-16,000 band, the trade sources told Business Line.

The strong speculative mood in the cotton yarn and fabric markets on the possible changes of the `cenvat' duty structure in the wake of the United Progressive Alliance Government favouring to remove the cenvat duty for powerloom has also added to the churning in the market.

Cotton yarn demand remained subdued and the weavers in primary fabric producing centres have chosen to wait and watch on the excise duty front, because they do not want to be saddled with a high cost raw material at a later date.

Similarly the hope on the dismantling of the `cenvat' duty at fabric stage has also made the weavers to go slow on production of fabrics. The uncertainty has practically rendered both the yarn and fabric markets inactive since the formation of the new Government at the Centre early this month, the sources said.