UPDATE 1-India cotton arrivals pick up in Gujarat, Maharashtra

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MUMBAI, Oct 10 (Reuters) - India’s cotton arrivals in the year ending September 2009 has started to pick up especially in western states of Maharashtra and Gujarat, country’s top producers, a senior government official said on Friday.

Arrivals across the country on Friday stood at about 45,000 to 50,000 bales of 170 kg each, the official who did not wish to be named, said. Arrivals in the Maharashtra and Gujarat together account for about 50 percent of total arrivals, he added.

“Arrival in Gujarat is about 15,000 bales and in Maharashtra about 10,000 bales. Since these two states are top growers, the arrivals would continue to rise in the coming weeks,” he told Reuters over the telephone.

The peak arrival period in the two states may be delayed by over two weeks to early November as most areas in these states witnessed late sowing due to delayed rains earlier this year.

The total area under the fibre-crop in this year’s sowing season is estimated at 9.1 million hectares, down 4.5 percent from last year.

However, the use of good quality seeds may limit losses in output, the official said.

India’s cotton output in the year ended September 2008 is estimated at about 31.5 million bales and current year’s output is seen at anywhere between 31 million to 32.5 million bales, senior industry and government officials have said.


Rising arrivals in the spot market have pushed down the prices of the medium-variety cotton in Gujarat but textile mills, facing a cash liquidity crunch, are not yet buying in large quantities, traders and the government official said.

Millers and traders are expecting prices to fall sharply tracking falls in the New York cotton market, where the December cotton futures CTZ8 fell more than 21 percent in a month.

Spot prices in Gujarat, the country’s largest producer, fell about 8 percent to 23,000 rupees per candy in a month.

“The mills are only buying to meet immediate requirements as they dont have money to cover for the whole year,” Sandip Jain, a leading cotton trader in Gujarat, said.

However, prices in Punjab, India’s fourth largest producer, which had fallen nearly 17 percent to a low of 2,400 rupees per 100 kg, rose after state-owned Cotton Corporation of India (CCI), started buying from farmers from Oct. 8.

“The rates of raw cotton have gone up by at least 70 rupees per 100 kg since CCI entered the market,” Babu Ram, a commission agent in Ferozepur district, said.

The government agency is procuring raw cotton at the minimum support price of about 2,800 rupees per 100 kg from Punjab, Babu Ram said. (With additional reporting by Ikhhlaq Singh Aujla; Editing by Ramya Venugopal)