It is observed that the short staple Bengal Deshi, medium staple J-34, long staple H-4 and Shankar-4 have shot above their January 1998 peak. Medium staple LRA and long staple MCU-5 bottomed out recently while extra-long staple DCH-32 bottomed out by mid-May 98 and are halfway through towards their peaks in last January. Besides, it can be seen that cotton prices move in three-four distinct bands. Thus short staple or coarse cotton prices range between Rs 3800 to Rs 4200 per quintal while long staple or finer cotton is priced around Rs 7000 and Rs 9,000. The medium count cotton and some long varieties vary in the range of Rs5,000 to Rs 6,000 per quintal.

Since January 98, Bengal Deshi fluctuated widely between Rs 3,796 and Rs 4,471 per quintal; J-34 between Rs 5,005 and Rs 5,708; LRA between Rs 5,146 and Rs 5,680; H-4 between Rs 5,455 and Rs 6,046; Shankar-6/4 between Rs 5,680 and Rs 6,186; MCU-5 between Rs 6,748 and Rs 7,648; DCH-32 between Rs 8,155 and Rs 9,221.

However, the recent upward trend is not so much due to improved demand from the spinning mills but because of drop in arrivals towards this fag end of the cotton season.

In January this year, cotton traders reacted to the news of lower cotton crop estimate at 169 lakh bales for the current cotton year (October-September) by the Cotton Advisory Board (CAB) in December 1997 and cotton prices flared up in January 98 only to retreat in February 98.

But after the CAB again revised crop estimate substantially downward to 147 lakh bales for the current year in April 98, cotton prices did not react so fiercely and remained somewhat steady. Even the news that the cottonoutput will even be lower around 142-145 lakh bales or even 140 lakh bales did not really affect the price front. In fact while the cotton traders expected a pick up in prices around April 98, the prices took a dip due to oversupply position in most of the varieties in the face of poor demand from the mills which in turn had to face slow offtake from the weavers mainly on account of slow-down in exports of fabric.

The main reasons for the sticky prices relate to the demand for cotton which is being increasingly replaced by synthetic fibres. Spinners find synthetic fibre at Rs 45 per kg - with around 2 per cent wastage - much cheaper than even a low count (20 single) cotton fibre at Rs 65 per kg with as high as 15 per cent wastage.

Last three months, the price movement was evident only in certain popular varieties of cotton like Bengal Desi (short staple), V-797 (short/medium staple) and Shankar-6 (long staple). The long staple cotton of 60 single count like H-4, MCU-5 and extra long variety DCH 32 having80 single count remained steady over a long period due to very high prices.

But now once again there is pick-up in all counters with certain finer varieties being in good demand at a time when the supplies have almost dried up.