In the previous cotton year, superior long staple like Sankar has touched as high as Rs 25,000 per bale. Even today the price hovers around Rs 23,000 which is an attractive offer, said a leading cotton merchant.

As far as cotton sowing is concern, in the long staple cotton category, almost 95 per cent of sowing is completed. Though the monsoons set in late this year, sowing has not been affected.

Primary reports indicate that the germination has been much beyond satisfaction, and according to traders if all goes well, the state can expect a bumper production this year.

Due to firm price trend in the last couple of years, long staple cotton has become the most favoured variety in the Saurashtra region and in the long staplecotton variety, Sanker has caught the fancy. It needs more water. so farmers tend to sow where good irrigation facilities are available.

Junagarh, Bhavanagar, and Rajkot districts are the main producing centers of Sanker cotton.

Sowing of the short staple cotton is nearly 60 per cent complete. This variety is more grown in the area called Wagad which is famous for short staple cotton like, Kalyan Co-2, Vagad and Kalagin. The soil in these area are relatively dry and due to insufficient irrigation, farmers prefer short staple cotton. In the north of Gujarat, farmers also prefer short staple varieties.

As far as prices are concern, due to bullish sentiment they remained firm still today. Stockists still possess large quantity of long staple cotton. In the anticipation of short supply in the latter part of the year some big traders have hoarded cotton. Following unprecedented bull run in the last quarter of 1997, some big players made windfall gains. Handsome earnings from cotton sales in the past fewyears have increased their hoarding capacity.

Cotton prices will remain firm till August, told one broker. "After Jain `parushan', illegal future trading called `kalyan kapas' resumes every year."

Favorable monsoons coupled with better crop conditions may see futures opened at lower prices compared to prevailing spot prices. It may lead stockists to go short in cotton.

It is interesting to note that the future which traded at Surendranagar is not recognized by Forward Market Commission but it is widely traded. Upcountry players from Delhi and Chandigarh take positions in this future. Due to good liquidity in future local dealers as well as traders also take position in future as a hedging and risk management of their physical inventory of cotton. How ever it remains "off balance sheet", or "kachha" said a broker. Most of the traders and brokers do not admit openly that they take positions on futures because this is an offense, he added.

According to one trader there will be shortsupply of superior quality of Shanker cotton till June end. 43.10 lacs bales have already arrived in the state. Out of this 4.75 lacs bales remained unsold. Total estimated crop is about 43.15 lacks bales.

Till today monsoon condition is favorable and chances are bright for good cotton out put, says one leading Broker. There are no reports of insects like white bee, if it won't arise, quality of cotton would be better. Aclearer picture of crop progress and sowing will emerge at the and of August, he added.