Though the current season for cotton had begun with firmer prices compared with those a year ago, this firmness could not be sustained and prices started easing as arrivals began gathering momentum, while the demand remained sluggish. Asthe accompanying table would reveal, the prices of most varieties around the end of May 1999 were ruling much lower than those a year ago. In certain varieties, the decline has been as much as Rs 1500-3000 per candy.

It may be interesting to note that but for the monopoly procurement scheme of the Maharashtra government which is being denounced by various circles on diverse grounds, there could have been a virtual crash in cotton prices this season. It is because the Mahafed is holding a substantial stock of cotton procured by it on behalf of the state government.

Actual arrival of cotton by the end of May 1999 are placed around 152 lakh bales of 170 kg each. Further likely arrivals are projected at 11-13 lakh bales depending upon one's crop estimate for the season.

According to some analysts, statewise arrivals by end of May 1999 this season have been as follows (In lakh running bales):-

Northern zone 24.25; Gujarat 44.00; Maharashtra 28; MP 18.75; AP 23.50, Karnataka 8.50; Tamil Nadu 3.50 and others1.25. Total 151.75, say 152, equivalent to 145.50 lakh standard bales of 170 kg each. Adding to this loose cotton consumption of the order of 6.25 lakh bales, total arrivals by the end of May 1999 may be of the order of 151.75 lakh bales, or say 152 lakh bales.

In view of slow internal demand and poor exports the end season stock might far exceed 45 lakh bales. This may have a bearish impact on cotton prices even during the next season, if there is a normal crop. Unfortunately, no attention is yet being given to this problem.