Forward deals of new cotton crop in the physical market have started for December 2008 delivery in the major cotton growing states mainly Gujarat, Punjab and Rajasthan.
According to trade sources, forward deals of nearly 2.50 lakh bales of Gujarat Shankar 6 variety have so far been reported in the past few days.
Thanks to forward buying by millers-cum-exporters, demand for new crop has increased significantly in the last few days.
There are hardly any sellers in the physical market. As a result, spot prices of major cotton varieties are ruling high, trade sources said.
Forward spot prices of S-6 in Gujarat are hovering around 27,000 per candy this week on steady buying while spot prices of Gujarat V-797 have also gained some ground and increased to Rs 20,500-21,000 per candy on continued buying interest. The gap between two major varieties has increased to Rs 5,000-6,000 from earlier level of Rs 1,500 per candy.
?Forward deals are reported for December delivery and most of deals are signed in the north region. The main buyers are millers-cum exporters. There is a shortage of good quality cotton in the market and demand for higher counts is very good,? Manilal Mehta, a local cotton dealer said.
New crop arrivals in Punjab are expected to come in by end-September or early-October. Many mills are likely to enter the market in the beginning of October as the new crop begins to come in and prices are expected to drop by early November, sources said.