Given the small volume of daily trades of around 10-15 units of ICC of three different delivery months, the unsettled trade of 125 units is surely high. Each unit of ICC is of 55 bales (of 170 kg each), or 93.50 quintals which at an average price of around Rs 4,750 per quintal, the amount of outstanding unsettled trades on the EICA works out to Rs 5,55,15,625.

Trading in the September delivery contract of ICC ends on September 30. However, if desired, the delivery of cotton can be tendered from September 16. As the delivery date comes closer, and with the uncertainty building up on the total availability of cotton next season, the players seem to have been entangled themselves in such a high level of unsettled trade.

The figure by itself may not be too large, but given the relatively small number of players on the country's only cotton futures exchange, and the daily volume on the exchange the number of outstanding trades is itself large and so also the total value of outstanding trades.

Cotton futures have been permitted since December 1998, and EICA alongwith its actively trading members have been making efforts to popularise the trading in cotton futures in various parts of the country. However, barring handful of cotton traders in Mumbai and few adjoining regions, hardly any other segment of the cotton economy has taken active interest in cotton futures.

Given this background in trading in the ICC on the EICA, the total volume of unsettled trades can be said to be unusually high.The trading pattern on the EICA has been speculative throughout since the launch of cotton futures. Of late, the reasons to leave the trades unsettled and carryover has been primarily because of the recent developments on the New York Cotton Exchange (EICA), which partly has been affecting the overall sentiments of the EICA players.

Also, the rain gods in India are playing truant in parts of Gujarat, Madhya Pradesh and Maharashtra which are important cotton growing regions. The traders were confident of good cotton crop from these regions just a fortnight ago.

But with rains receding since the past couple of days and cotton prices moving up sharply on the NYCE has given reasons to the players on either side to wait for the other side to weaken and therefore, the large volume of 125 units in unsettled trades.

Currently, the cotton prices are said to be sluggish and the players on both sides are waiting for either good or bad news. "The moment such a news comes out, the players will run to cover their positions", said a cotton trade source.

Against the spot price of Rs 4,893 per quintal, the September 2000 delivery ICC closed on Thursday at Rs 4,758 per quintal, down 17 points from the previous settlement of Rs 4,775 per quintal. There was no trading for the December 2000 delivery contract, while the February 2001 delivery contract closed sharply lower at Rs 4,343 per quintal.