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ReturnSURESH MEHTA ANALYSIS(14)--Review on silk market(Dated on Jan. 7,2006)
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PublishDate：
2006-01-09 09:00:00
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dear friends
wish u all an eventful 2006
raw silk: indian silk industry at crossroads
The warning bells are ringing here . raw silk flight to glory has
reached its peak now and the time is ripe for corrections . As the local industry is unable to absorb the cost any more the trading volumes are falling down day by day. the lower volumes may also decrease again if the upward movement of raw silk is not corrected . india imports almost 50% of china's raw silk and this will certainly have an impact on the price if indian imports stop or trickle down to almost nil volumes. it is in the interest of the silk industry that the correction should happen before march 2006 . also adding to the fact that chinese government has increased the quota by another 3000 tonnes for silk exports for 2006 this will bring in new players in the chinese export community . the low volume sales locally may change the situation to overstock and may decrease the price in india as the imports have been very high during november 2005. with indian importer traders out of the picture it is only the exporters who can buy on a need basis at these levels , a correction now will pull in the trader importers and raise the volumes again as the volume is generated by the trader importers.the risk involved for every one who are hoarding stock in anticipation of still higher prices is very high now and any buyer entering at these price levels may lose more than they can make . it will be wise for every one to backout now and wait for the correction, including the chinese exporters. the time for speculators is over now.in fact the mood should now be on dupion silk and tussah silk yarn as these two items have a genuine shortage in china and has the room for
upward movement .
Dupion
Dupion is rising like raw silk did in early 2005 and looks like the
shortage will fuel more upward momentum. silent buying is going on for dupion and the fear mode is working well with expectation that dupion may still rise . looks like dupion is on the right path to become the king of 2006 .
Tussah
tussah is slowly moving towards the usd 30 mark and the buying is going on discreetly at lower levels , even though the demand from india may not be very high the shortage will certainly lead to upward quotes , tussha like dupion has remained silent in 2005 with sudden burst of appreciation , however may shoot up next week or in the coming weeks before the spring festival holidays.
Fabrics
Fabric has finally got the push it needed and this time all fabric mfrs can make some gains as the shortage is evident in both places and may fuel the upward movement , 12101 , 10101 and 10103 will be witness steady buying and later the demand will be more for 10101 and 10103 as the indian summer comes out .
b rgds
suresh mehta
wish u all an eventful 2006
raw silk: indian silk industry at crossroads
The warning bells are ringing here . raw silk flight to glory has
reached its peak now and the time is ripe for corrections . As the local industry is unable to absorb the cost any more the trading volumes are falling down day by day. the lower volumes may also decrease again if the upward movement of raw silk is not corrected . india imports almost 50% of china's raw silk and this will certainly have an impact on the price if indian imports stop or trickle down to almost nil volumes. it is in the interest of the silk industry that the correction should happen before march 2006 . also adding to the fact that chinese government has increased the quota by another 3000 tonnes for silk exports for 2006 this will bring in new players in the chinese export community . the low volume sales locally may change the situation to overstock and may decrease the price in india as the imports have been very high during november 2005. with indian importer traders out of the picture it is only the exporters who can buy on a need basis at these levels , a correction now will pull in the trader importers and raise the volumes again as the volume is generated by the trader importers.the risk involved for every one who are hoarding stock in anticipation of still higher prices is very high now and any buyer entering at these price levels may lose more than they can make . it will be wise for every one to backout now and wait for the correction, including the chinese exporters. the time for speculators is over now.in fact the mood should now be on dupion silk and tussah silk yarn as these two items have a genuine shortage in china and has the room for
upward movement .
Dupion
Dupion is rising like raw silk did in early 2005 and looks like the
shortage will fuel more upward momentum. silent buying is going on for dupion and the fear mode is working well with expectation that dupion may still rise . looks like dupion is on the right path to become the king of 2006 .
Tussah
tussah is slowly moving towards the usd 30 mark and the buying is going on discreetly at lower levels , even though the demand from india may not be very high the shortage will certainly lead to upward quotes , tussha like dupion has remained silent in 2005 with sudden burst of appreciation , however may shoot up next week or in the coming weeks before the spring festival holidays.
Fabrics
Fabric has finally got the push it needed and this time all fabric mfrs can make some gains as the shortage is evident in both places and may fuel the upward movement , 12101 , 10101 and 10103 will be witness steady buying and later the demand will be more for 10101 and 10103 as the indian summer comes out .
b rgds
suresh mehta
