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India:Poor buying leads to subdued cotton prices |
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2004-11-16
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Low demand for cotton by textile mills have led prices lying low. The decline in prices was halted this week, due to staggered arrivals of kappas cotton from the production centres to the ginners, informed cotton trade sources said.
Add to this the huge yarn stocks held by textile mills have led to low booking of new raw cotton purchases. Some spinning mills have gone to the extent of stocks pileup to take care till January next, it’s the cotton traders who will find the going tough in the local market where the buyers have done the vanishing act; while all cotton sold was only for immediate consumption only, the trader sources said.
Global cotton prices have been down with anticipated rise in cotton output, textile mills in the country are in a ‘wait and watch’ mode 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.
Meanwhile, 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 trends indicate that this price may be expected to go down to 45 cents level by beginning of next month. The high-priced cotton stocks presently held by textile mills 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. |
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