The Hindu Business Line : Heavy arrivals bring down cotton prices

COTTON prices in the country may rule weak over the next few days mainly on steady increases in daily inflows of the recently harvested crop into the North region against restricted demand from local millers.

Domestic prices of prominent cotton varieties such as J-34 SG, Shankar-4 and 6, Bunny and Brahma have crashed by over Rs 600 per candy (355.56 kg each) in the last three days.

Total daily inflows are around 6,000 bales (each of 175 kg) including 5,000 bales in northern States (Punjab, Haryana and Rajasthan) and nearly 1,000 bales in Gujarat, Maharashtra and Madhya Pradesh.

"In the north region, sellers are offering J-34 SG at Rs 15,000-15,500 per candy but buyers are local millers. Trading volume is low as inflows are yet to pick-up," Mr Bhavik Mehta, a local broker said.

Shankar 4 and 6 varieties in Gujarat are being offered at Rs 15,500-16,000 per candy. "Local mills are buying in small quantities. Demand is yet to pick up," he said. Daily inflows of new cotton have started with slow pace but they will pick-up momentum by the next two weeks, sources said.

"Bright sunshine has been noticed in some parts of the country which will help the cotton crop. Sky is clear and inflows of raw cotton may pick up in next few days. In Gujarat, inflows will pick up after Dassera festival," another broker said.

In Gujarat, cotton has been sown on a total of 20.77 lakh hectares according to the State Government. In the last cotton season 2004-05 the yield is estimated at 625 kg per hectare of cotton sown.

"If we take yield as constant, the crop size potential in Gujarat can be estimated at 76 lakh bales of 170 kg each. While last year reports suggested a 60 per cent share of Bt seeds, this year at least 85-90 per cent is being put as an estimate of Bt seed share in medium-long & long staple growing areas," Mr Mitesh Shah, a Gujarat-based trader said.

Heavy rains across most cotton growing areas barring the northern States, could impact the crop, trade sources said. Cotton crop has been damaged in Maharashtra, Gujarat, Andhra, Karnataka and Madhya Pradesh but the extent of damage is not yet known, they said.

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