"Our estimates are lower because nearly 1.0 million baleshave been damaged by bad weather in the states of Punjab and Gujarat," Manoj Gala, a leading trader said in Ahmedabad, the main city of the cotton producing Gujarat state.

India's Cotton Advisory Board had in November estimated thecotton output for 1998/99 at 17.5 million bales (170 kg per bale), up from 15.8 million bales last year. The board comprises government and industry officials.

"Initially we had estimated output at 18 million bales,then we brought it down to 17.5 million bales and now it is expected to be around 16 million bales," Gala said.

"In Gujarat the yield estimates have fallen to 4.2 millionbales from 4.8 million bales and in Punjab the output is expected to be 2.4 million bales, down from 2.8 million bales."

Cotton crop inthe state suffered damages in August andSeptember due to a heat wave, Gala said, adding that the quality of the crop was also poorer than that of the previous year.

He said the crop in other cotton producing states ofwestern Maharashtra, central Madhya Pradesh and southern Andhra Pradesh have been unaffected."There is no possibility of export as the crop prices arehigher in India and quality is also not very good," Gala said.

He said cotton prices in the international market werearound 18,100 Rupees ($425.38) to 18,400 Rupees per candy (one candy equals two bales) against 19,400 Rupees to 20,500 Rupees per candy of similar quality in India.Textile mills in India are importing 125,000 bales of longstaple cotton from Turkey and Australia at the rate of 18,100 Rupees to 18,500 Rupees per candy.Another trader, Deepak Shah said cotton prices wereexpected to remain firm till end-December on higher demand and low arrivals.

"Prices will be firm until higher arrivals start from thestates of Maharashtra andMadhya Pradesh," he said.

Shah said about 80,000 bales of cotton were arriving dailyin the market, mainly from the states of Gujarat and Punjab.

"We expect the prices to start coming down steadily in thefirst week of January when over 95,000 bales start arriving," Shah said.

Shamji Khnood, president of Rajkot marketing yard said:"There is good demand because the Cotton Corporation of India (CCI) has also started its purchase last week." Rajkot is 210 km (131 miles) West of Ahmedabad.

CCI purchased 250,000 bales of cotton in Gujarat in 1997/98(Oct-Sept) out of the total crop of 3.5 million bales.

Meanwhile, mixed price trend continued toprevail for cotton lints during the first fortnight of November, according to South India cotton association (sica).

The inflow of new crop was less in Punjab, Haryana andRajasthan, while kappas arrivals were disrupted in central and southern parts of the country following wet weather conditions, sica said in its market report for the period.

The lint prices gotstabilised in Punjab, Haryana andRajasthan belts following a marginal gain in the first half of the period.

However, there was no improvement in the arrivals, and mill demands, the report said. Bengal deshi was offered at Rs..1,550 to Rs..1,575, while J-34 saw gin quoted at Rs..1,900 to Rs..1,950 per maund spot for new crop.With mills demands restricted to small lots and arrivalsdisrupted by unseasonal rains, lint prices remained easy in Gujarat. Shankar-6 new crop was quoted at Rs..19,500 per candy spot, the report said.

Despite lesser mill demands and slow arrivals, pricesruled steady in Madhya Pradesh, where new crop of H-4 was offered at Rs..19,500 per candy spot, sica said. More PTI nvm pbj vks 11221056 B Maharashtra cotton federation had further reduced theprices of few cotton varieties of 1997-98 crop from nov six. New crop procurement was yet to gain momentum in this belt, sica report said.

In the southern pockets of the country, the second spellof excessive rains affected the crop inrayalaseema and other major belts of andhra Pradesh, whereas picking and kappas arrivals from this belt were affected further due to unseasonal rains, it said. However, arrivals of small lots in warangal, adilabad and adoni were reported during the period.

In Karnataka, the arrivals of main kappas variety dch-32were affected following the second phase of rains and quality of crop was also affected due to bad weather and lack of storage facilities, the report said. The slow movement of finished goods and continuedrecessions had adversely affected the fund flow to the textile trade and industry, sica said.

Due to overdue debts burden, mill sectors were unable to plan their requirements and trade circles expressed their concern over the situation and anticipate chain of effect on the textile industry as a whole, unless remedial measures were taken by the concerned agencies, the report said.