The Hindu Business Line : Cotton market under pressure on poor buying

THE cotton market continues to witness price pressures in the face of lack of buying by the textile mill consumers. Further price fall has been halted this week, thanks to the staggered arrivals of kappas cotton from the production centres to the ginners, informed cotton trade sources said.

The continued uncertainty on the market fortunes for the spinners who are saddled with huge yarn stocks has come in the way of textile mills booking any new raw cotton purchases. With many spinning mills keeping raw stocks that will last even up to January next, cotton traders find the going tough as far as finding buyers in the local market; and whatever cotton traded was only for immediate consumption only, the trader sources said.

With the global cotton prices anticipated to further soften due to rising crop, textile mills in the country prefer to wait and watch before making any determined move to buy local cotton. ``Between now and December, we do not foresee any bulk buying of cotton by the domestic textile units which are all hoping that the international cotton prices will come down to as close as 45 cents per pound from the present 50-56 cents,'' informed cotton trade sources.

The sources said that as of now the West African premium cotton of 28 mm plus which is equivalent to India's Sankar-6 variety is being quoted at 50 cents (for c.i.f Indian port) and indications are that this price may be expected to go down to 45 cents level by beginning of next month. This prospect has forced many Indian mills to postpone covering their cotton needs in the new crop. The high-priced cotton stocks presently held by them and the difficulty in realising the right price for their finished cotton yarn have added to their dilemma. This has resulted in most spinners not effecting any revision in the yarn rate for the November delivery, sources added.