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SURESH MEHTA ANALYSIS(5)--Weekly review of indian market (Till Oct 1)
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PublishDate:
2005-10-02 22:58:00
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(By Suresh Mehta)


Dear friends
Wish you all a happy holiday.

Raw silks new price momentum has generated considerable interest and speculation is on that where will it end? I think we have reached the peak for raw silk and the momentum from here will be more steady and stable, The coming Months Of Oct and Nov do not allow room for further increase, as after The Chinese national day holidays and the dussehra holidays(Oct 11th to oct19th) in India we have the fair in Guangzhou, it all indicates that prices for raw silk will be steady for October and November. Any Further increase will harm the flow of imports as indian market cannot sustain high prices beyond this level. It is in the interest of the trade that price be maintained and kept steady and let the fair decide the trend from there on .we also see from the Indian Import data that imports have reduced as prices go up for raw silk. Even though we do not see any signs of down trend the best possible range for Chinese exporters is in between USD 24 and USD 25 for Oct and Nov. The idea behind this is as Indian market has already absorbed the excess cost of import and the dollar appreciation of about 2% against Indian rupees the landing cost is already up about USD 1.50, so any further increase in the raw silk price will be counter productive. The demand from India for raw silk after the dussehra festival will be fair and at a steady pace.

It is very amazing to see the price difference between raw silk and Dupion silk yarn this year, a gap of almost USD 5. However interest is Being shown in the popular dupion mills and some buying has started, It is assumed that this will slowly pickup and demand will start getting steady for dupion also. The initial buying is due to the fact that dupion at present is available at low prices and may increase also following raw silk. As there is much room for appreciation in dupion it is finally the demand which may be decisive in dupion pricing .

Tussah silk yarn should rule in Oct and November as the news about the shortage this year is well known. We can only see one way for tussah upwards till the supply demand chain is rectified . the upcoming seasons in india will also support the tussah demand and we may see very high Prices for it.

The fabric situation more or less has been stagnant in india though
we have seen good buying in the last weeks , buying is on for 12101 and 10103 on a steady pace and this should continue in spite of the fact that anti-dumping may be effected in november , the coming months will see more buying in 10101 , 10103 and 12101 .

Finally speaking 2005 has been a very exciting year so far for the
yarn business and we don't see any reasons for it to be dull , technically speaking,based on the data and statistics it should remain the same till march 2006 however we can see some price correction during the end of november , december till early january , but the bottomline again is we cannot visualize the prices going below Usd 24 at present.


WHOLESALE PRICE INDEX
open market -prices - bangalore - chinese yarn
date : oct 01 2005

mulberry raw silk 20/22 3/4 a
RS 1370.00

dupion silk yarn 100/120
RS: 1050.00 - NORMAL MILLS
RS 1090.00 - TOP MILLS

tussah silk yarn 33/37
RS 1340.00

thrown silk 20/22 2/3 ply s300,S330,S360
RS 1400.00

organzine 2 ply z800/s700
RS - 1500.00


FABRICS AVERAGE PRICES
12101 RS-125 SICHUAN
10103 RS-128 ZHEJIANG
10103 RS-135 SICHUAN
NOTE : PRICE ARE IN INDIAN RUPPEES/ KG
PRICE ARE INCLUSIVE OF IMPORT DUTY BUT EXCLUSIVE OF VAT IF ANY

Total Indian silk import data
2005 rawsilk tussah dupion fabrics thrown/twisted/organzine/noile etc
June 498.637 57.254 225.633 6905039 76.067
July 484.563 88.363 215.231 8238472 78.031
August 437.577 119.847 199.001 6171937 73.985 35.997

weight in tonnes - fabric in meters
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