The advantage of a weaker Indian rupee had recently offered some hopes of Indian cotton becoming competetive in the international markets where the prices had jumped to lifetime highs of around US cents 67.31 per lb recorded last Tuesday. But on the New York Cotton Exchange (NYCE), the most active Dec cotton futures prices are seen sliding.

Last week, speculators joined hands on the NYCE to sell and book profits, thereby partly nullifying the advantage of relatively cheaper Indian cotton.

The hopes are however, not altogether vanished for two main reasons: One, the fundamentals on the international cotton front still looks bullish as persistent dryness and proof of crop damage is reducing the size of US cotton production in most players' mind. Two, the domestic cotton prices are expected to be dampened till early-2001 following the expectations of yet another round of bountiful cotton crop next cotton season beginning Oct.

Though delayed, the rains in almost all cotton growing regions - including Gujarat, Maharashtra and Andhra Pradesh - are said to be highly favourable resulting in better cotton crop this next season. If the prices stay sluggish, traders say, there are chances of exporting cotton next year.

Mahacot, claiming to be the world's largest cotton supplier and supporting over two million cotton farmers in India, had on Aug 11 invited sealed global tenders for purchases of 50,000 cotton bales (of 170 kg each) of various qualities acquire during 1999-2000 cotton year that ends next month.

On opening the bids on Aug 24, Mahacot is understood to have received bids of around 39 to 45 cents against the expected price of 42 to 51 cents. The global tender was in terms of the Textiles Commissioner's letter dated Oct 10, 1999 for release of the export quota of 55,000 bales of cotton of varieties NH-44 S/F variety (similar to 27 mm length).

Alleging that the Mahacot cotton quality is not of uniform quality required in the international markets, exporters who had hoped to take advantage of the high international cotton prices had bid slightly lower than Mahacot's expected prices.

Last month, with the Cotlook indices jumping to around 66 to 67 cents, there was a clear price difference of around Rs 1,500 to Rs 2,000 per bale available to exporters if they had succeeded. However, this price difference appeared vanishing fast last week with the Cotlook indices on the NYCE declining.

Meanwhile, not receiving the expected prices, Mahacot for the second time this year failed in its efforts to export cotton, after it made a similar effort in June this year. This indicates that during the current cotton year ending this month, the targeted five lakh bales of cotton will remain unfulfilled and the unfulfilled quota will lapse. Given the prospects of rising cotton availability in the new cotton year beginning Oct, the Government is expected to remove the quota restrictions altogether and put the cotton exports under open general license. The cotton imports are under the open general licence. With fresh round of cotton pickings set to begin from Sept 15 the prices of almost all varieties of cotton are likely to slide further even on the domestic markets.

Pushing aside its recent failure, Mahacot has once again invited sealed tenders from reputed agencies working in cotton related business for undertaking the work of drawing of samples from full pressed cotton bales stored at different locations in Nagpur, Yeotmal, Akola, Amravati and other zones. The tender documents giving terms and conditions of the work will be available for a week's time beginning Sept 5.

These tenders will be opened on Sept 12.
Meanwhile, indiancommodities.com estimates indicate the total cotton availability this next season is expected to jump to 164.3 lakh bales, higher by around 2.8 lakh bales than just concluding cotton season. This is because of the better than expected rains in central Maharashtra and Gujarat.

The higher cotton estimates is said to be mainly on account of better than expected rains in Central Zone of Maharahtra and Gujarat. This year cotton crop in Northern India is expected to do well though crop has been reduced compared to previous estimate in July. This was mainly on account of reduced area under cultivation. The crop condition is reported to be very fine. The due dry weather and western wind blowing is expected to be very beneficial for standing crop.

At present the height of the plant is 3 to 4 feet and there are about 30 to 40 balls per plants. If the current favourable weather continues the quality of the crop shall improve further. The arrivals of the new crop are expected to start in first week of Sept. The arrivals of Deshi varieties of cotton would start around 1st week of September and J34 crop is expected to start by 10 to 12 Sept.