``A number of ginners have voluntarily decided to suspend dealing with the southern mills. Around Rs 400-450 crore worth of payments has been blocked by the southern mills. Government could help resolve this issue, but it was not of much help'' said Raju Doshi, managing director, Raju Cotex Manavadar, a leading centre of long staple cotton.

He said that a bumper cotton crop and lower global prices would result in the surge of cotton import. Current season cotton import may touch 25 lakh bales against last year's 8 lakh bales, he added.

A leading cotton broker said that ginners who decided to eliminatebrokers, started dealing directly with textile mills, and burnt their fingers.

Earlier, there was a three-tier structure in which the brokers were acting as mediators. In such a system, credit default risk was reduced.

Meanwhile, parallel futures traded at Surendrannagar turned bullish amid aggressive buying by local operators. The bulls have formed a syndicate like in previous years, said a local scalper. The future opened around Rs 360 and soared to contract high of Rs 383 from the recent low of Rs 354 per 20 kg.

Sentiment turned bullish due to rumours of a possible imposition of import duty on cotton imports. According to Arun Dalal, a leading cotton broker, there are unconfirmed reports that government may impose a duty on cotton import and also hike a import duty on edible oils.

According to Chandubhai Thakkar of Perfect Cotton, Egypt has announced a ban on the export of long staple cotton like Giaz and etc. Egyptian farmers and spinners recently met President Hosni Mubarak after which thecountry announced a ban on the exports of long staple cotton like Giza-85, giza-89 and Giza 86.

It is worth noting that the cotton crop in Egypt is being considered lower in the current year. Thanks to the ban, Indian mills will have to source their needs from other counters like US long staple Egyptian cotton is famous for its softness. However, its demand is decreasing, since the last few years due to a change in fashion trends. As the wrinkle-free cotton apparel became popular, leading mills prefer long staple like Prima Cotton of USA. It is interesting to note that the future known as the Kalyan Kabala is one of the largest over-the counter futures in the country and favourite among northern and Rajasthan-based traders. A so-called market maker, a big operator of Sirsa Rajastahn is yet to be active in the futures, it is believed. Volume in the futures is likely to increase after Deepavali.

Meanwhile, cash market remained subdued amid holiday mood and lack of adequate demand. Long staple cotton Sankerwhich opened around Rs 20,000 in the season, is now hovering around Rs 18,000-19,200 per bale. Cotton crop is seen good. Daily arrival in Gujarat is around 10,000 bales. Arrival of long staple will pick up after Deepavali. Short staple cotton like Kalyan will hit the market after January, traders said.