SURESH MEHTA ANALYSIS(6)--Weekly review of indian market (Till Oct 8)
Author:
admin
PublishDate:
2005-10-10 08:34:00
Hit:
468
Raw silk' ability to go up is surprising and we have seen the new high this week. The increased import cost in India has been absorbed by the market and we have seen the correction as expected with the prices rising to about rs 1400. However this increase is in no way related to the new high quotes of chinese exporters which has still to be absorbed and this is the worrying factor.does the indian market have the depth and strength to absorb such high cost.the hidden fear of indian importers is on the peak now and are unable to fathom whether this increase in china is due to real shortage or is it because the fair is coming up.does anyone have the answer ?
Past statistics show that the market is always depressed after the fair and the rates weaken within a month after the fair.there is no reason to believe that it may not be the same this year too, as the prices go up the import volumes to india will decrease rectifying the sharp increases of raw silk price. It is imperative and in good health of future raw silk business that stability be induced at this point. It is better late than never .
Sensibility and maturity is the need of the market now and it has to be provided from the chinese side. However as per my previous reviews i think it is the fair which will be the deciding factor for future prices. Moreover with holidays coming up for silk factories from 11th onwards in india and the up coming fair the business volume may be relatively low unless the price settles down.
There has been no other development in the indian side this week except for the price increase and we need to wait and watch for the next two week now.
Dupion
Dupion sadly is the poor cousin this year and with another quarter left in 2005 there seems no hope for it, the excitement , thrill , suspense we witnessed in raw silk this year has had no effects whatsoever in dupion and it has remained dull and drab.
It is very apparent now that the dupion production has to be reduced drastically now to make it as attractive as raw silk and revise the supply - demand ratio .
A special article about dupion will be mailed during the next week for chinese producers :"making 2006 a year for dupion " and it is possible .
Tussah
Tussah is just stirring up and may take another 15 days before the rise start in india as too much cargo is flowing freely here. However with new quotes from china on the higher side it may shoot up earlier also.
Fabric
Fabric has began showing signs of stability and we can see a robust steady growth of 12101 ,10103 and 10101 - the orders for the same are in a steady manner however the new quotes are yet to be accepted by indian importers as many orders has been booked when the market was lesser and more workable.
Wholesale price index
open market - bangalore - chinese yarn - dt Oct 8 2005
Raw silk 20/22 - rs 1400
Dupion 100/120 - rs 1060 normal
rs 1100 top mills
Tussah 33/37 - rs 1360
Thrown silk 2ply - rs 1430
Organzine - rs 1530
B rgds
Suresh mehta
Note : there will be no reviews for the next two weeks due to the holiday here and the fair , the next review will be after the fair , however the article about dupion will be sent shortly