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ReturnSURESH MEHTA ANALYSIS(11)--Weekly review of indian market (Till Nov 26)
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PublishDate：
2005-11-28 09:00:00
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Dear Friends
Raw Silk
The market is awaiting the resumption of the electronic transactions on the jiaxing exchange anxiously. Which way will it go on the first day? With no benchmark levels now, there is a lot of difference in opinion regarding the future movements of raw silk.
The sentiments in India have again changed to stability and firm prices. The market is gradually correcting itself to absorb the increased cost. The gradual increase is a healthy sign that it is a stable upward movement rather than speculation. From last week low of RS 1500, it has moved up to RS 1540 almost absorbing one USD in a span of five days. Stability is the need of the hour and we have seen stability from the Chinese side.
However, in view of the increased cost the import quantity is decreasing almost by 10% every month
From the peak in June of about 493 tonnes, it has reduced to 334 tonnes in October, a drop of almost 30% in a span of 4 months. This may lead to two situations – over stock in china or shortage in India in the coming weeks. The first seems unlikely but the second looks real if the November imports also hovers around the same range. We expect to see an upward movement again if the shortage is felt in India. Added to this fact is the Indian crop does not look so promising with heavy rains around the crop areas and the Indian raw silk prices shooting up by usd1.50 over night . We may witness the final round of high prices for raw silk and see the peak of the king of yarns.
Dupion
Dupion remains steady now however there had been an increase in the month of October imports by almost 30% from September imports which were a mere 130tonnes . However, this import has all been at the lower prices before the prices shot up in china and it will take some more time for any serious movements in India, dupion will again go down in December and January in china. The only good thing is that there is no down ward trend seen in India after the correction happened from RS 1050 to RS1150. Though the local demand is not very good, the prices have remained stable due to the high quote from china.
Tussah
Last week we sensed the upward movement of tussah and it has really jumped by usd 1.5 in the local market. As per our earlier reports that tussah will move up after November 15 it has precisely done so in both countries. With local price hovering about Rs 1460 -1470 now, there is expectancy of further upward movement to absorb the new cost factors in tussah. Tussah should cross the RS 1500 mark very shortly.
Fabrics
Somehow, the expected movement in fabrics has not yet taken full steam and in fact has witnessed a down in India this week. With new quotes from china unworkable, the import assumed has not really taken off. Buyers are still hesitating to place orders at these levels and may take some real time. With local buyers of silk fabrics, diverting to other local Indian fabrics of other yarns it is really a tough time for fabric importers now. Unless there is a real local demand for silk fabrics, we may not witness any huge buying in the coming weeks. Added to this aspect the coming Christmas holidays and New Year in December end may only dampen the spirit of the importers. The best Idea for fabric exporters in china would be to close the gap difference with the buyer and offload the cargo.
B rgds
Suresh Mehta
Wholesale Price Index - Bangalore Market
Raw silk 20/22 - Rs 1540.00
Dupion 100/120 - Rs 1150 normal mills – Rs 1180 Top Mills
Tussah Silk 33/37 – Rs 1465.00
Tram/Thrown - Rs 1550.00
Organzine - Rs 1690.00
Fabrics
12101 – Sichuan Rs 138.00 Zhejiang Rs 133.00
10103 – Sichuan Rs 139.00 Zhejiang Rs 133.00
Raw Silk
The market is awaiting the resumption of the electronic transactions on the jiaxing exchange anxiously. Which way will it go on the first day? With no benchmark levels now, there is a lot of difference in opinion regarding the future movements of raw silk.
The sentiments in India have again changed to stability and firm prices. The market is gradually correcting itself to absorb the increased cost. The gradual increase is a healthy sign that it is a stable upward movement rather than speculation. From last week low of RS 1500, it has moved up to RS 1540 almost absorbing one USD in a span of five days. Stability is the need of the hour and we have seen stability from the Chinese side.
However, in view of the increased cost the import quantity is decreasing almost by 10% every month
From the peak in June of about 493 tonnes, it has reduced to 334 tonnes in October, a drop of almost 30% in a span of 4 months. This may lead to two situations – over stock in china or shortage in India in the coming weeks. The first seems unlikely but the second looks real if the November imports also hovers around the same range. We expect to see an upward movement again if the shortage is felt in India. Added to this fact is the Indian crop does not look so promising with heavy rains around the crop areas and the Indian raw silk prices shooting up by usd1.50 over night . We may witness the final round of high prices for raw silk and see the peak of the king of yarns.
Dupion
Dupion remains steady now however there had been an increase in the month of October imports by almost 30% from September imports which were a mere 130tonnes . However, this import has all been at the lower prices before the prices shot up in china and it will take some more time for any serious movements in India, dupion will again go down in December and January in china. The only good thing is that there is no down ward trend seen in India after the correction happened from RS 1050 to RS1150. Though the local demand is not very good, the prices have remained stable due to the high quote from china.
Tussah
Last week we sensed the upward movement of tussah and it has really jumped by usd 1.5 in the local market. As per our earlier reports that tussah will move up after November 15 it has precisely done so in both countries. With local price hovering about Rs 1460 -1470 now, there is expectancy of further upward movement to absorb the new cost factors in tussah. Tussah should cross the RS 1500 mark very shortly.
Fabrics
Somehow, the expected movement in fabrics has not yet taken full steam and in fact has witnessed a down in India this week. With new quotes from china unworkable, the import assumed has not really taken off. Buyers are still hesitating to place orders at these levels and may take some real time. With local buyers of silk fabrics, diverting to other local Indian fabrics of other yarns it is really a tough time for fabric importers now. Unless there is a real local demand for silk fabrics, we may not witness any huge buying in the coming weeks. Added to this aspect the coming Christmas holidays and New Year in December end may only dampen the spirit of the importers. The best Idea for fabric exporters in china would be to close the gap difference with the buyer and offload the cargo.
B rgds
Suresh Mehta
Wholesale Price Index - Bangalore Market
Raw silk 20/22 - Rs 1540.00
Dupion 100/120 - Rs 1150 normal mills – Rs 1180 Top Mills
Tussah Silk 33/37 – Rs 1465.00
Tram/Thrown - Rs 1550.00
Organzine - Rs 1690.00
Fabrics
12101 – Sichuan Rs 138.00 Zhejiang Rs 133.00
10103 – Sichuan Rs 139.00 Zhejiang Rs 133.00
