NATIONAL NEWS ABOUT COTTON- JANUARY, 2017

JANUARY 27,2017

COTTON RULES FLAT ON MODERATE DEMAND RAJKOT: Moderate demand at the higher level kept cotton price unchanged on Friday. Export buying was limited due to price rise in past few weeks.

Trader said that during January most of the time cotton price was gained which decreased the demand from domestic mills andexporters .

Gujarat Sankar-6 cotton was traded at ₹42,500-43,000 per candy of 356 kg. About 35,000 bales of cotton arrived in Gujarat and 1.55 lakh bales arrived in India.

Kapas or raw cotton increased by ₹5 to ₹1,090-1,155 per 20 kg and gin delivery kapas stood at ₹1,160-1,200 per 20 kg.

According to traders, much rise in price may reduce the demand but on the other hand, as farmers are not selling cotton fall may be limited in the cotton rates.

Source:http://www.thehindubusinessline.com/markets/commodities/cotton-rules-flat-on-moderate-demand/article9505909.ece

January 25, 2017

Desi cotton fails to bring cheer

Farmers who shifted to desi cotton from BT variety on recommendation by agricultural scientists

are a disappointed lot. They claim to have incurred heavy losses due to low crop yield.

A committee of experts from agricultur universities in Punjab and Haryana and the Central

Institute of Cotton Research (CICR) had advised the farmers to opt for desi cotton to avoid the

whitefly attack.

Those who opted for desi variety rue low yield on account of early maturing of the crop. Jagdish

Kumar, a farmer of Bahbalpur village, said, “I sowed desi cotton in two acres and got a yield of

just 80 kg whereas the input cost is Rs 15,000 to Rs 20,000 per acre.”

Another farmer Dalip Singh said desi variety yielded two quintals from one acre, adding the plants

were destroyed by heat, adding he had to uproot the crop a month in advance.

Rambhagat, a farmer, claimed BT variety had better yield this time as there was no whitefly attack.

However, Rajiv Bhatia, agriculture officer, claimed that rain may have damaged the crop at the

maturing stage, adding there was no wilting which would have harmed the crops.

Source:http://www.tribuneindia.com/news/haryana/community/desi-cotton-fails-to-bring-

cheer/354877.html

January 25, 2017

Cotton prices are up 7.5 per cent in January on lower arrivals despite estimates of

a bumper output this year.

The benchmark, Shankar 6 variety, was traded at Rs 11,979 a quintal on January 24, a rise of Rs

850 from early this month. Other varieties of fibre have moved up similarly.

The agriculture ministry in its first advance estimates projected India’s cotton output at 32.12

million bales (170 kg each) in 2016-17, up from 30.15 million bales in 2015-16.

Ginners are facing a squeeze in their margins because they cannot pass on the increase in cost to

consumers. Multinational companies active in purchase of cotton have dented the business of

local cotton traders and ginners by holding on to stocks.

“Multinational companies enjoy the advantage of having a presence in many countries where they

hedge risk in the cotton trade. Domestic commodity exchanges have not done enough to educate

traders. Despite having a hedging facility, traders do not participate in the contract,” said Arun

Dalal, an Ahmedabad-based cotton

trader.

Rising cotton prices have driven India out of the global trade. Exporters, however, continue to

meet old commitments.

“Cargill does not indulge in market manipulation. Demonetisation has hampered the supply of

agricultural commodities and cotton is no exception,” said a Cargill India spokesperson.

“Estimates show arrival of raw cotton is behind its usual pace at this time of the season. This

shortfall follows an already tight Indian supply towards the end of the previous season,” the

spokesperson added.

“Our activity is focused on providing trading solutions to our customers and suppliers. This

activity is conducted in accordance with the law,” Glencore said in an email response to a Business

Standard query.

Emails to Singapore-based Olam International and the Netherlands-headquartered Louis

Dreyfus Company did not draw any response.

A study by Care Ratings shows domestic cotton prices fell by about 16 per cent during July-

November on weak demand from spinners. However, prices picked up marginally during

October-December with new cotton arrivals.

“In November-December, daily cotton arrivals were lower by around 10 per cent, year on year,

due to demonetisation. In the cotton season 2016-17 (October-September), with an increase in

production and stable consumption, cotton exports are expected to pick up,” said Darshini

Kansara, research analyst with Care Ratings.

Source:http://www.business-standard.com/article/markets/cotton-price-rally-traders-

blame-mncs-117012501497_1.html

JANUARY 17,2017

Cotton set to make comeback as pulses disappoint growers

After losing out about 20 per cent area to pulses, cotton is set to regain the lost ground in the

upcoming kharif season.

With prices of pulses crashing, farmers are expected to go back for cotton next season. The seed

industry expects a growth of 20 per cent in sales next season over the 3.6 crore packets it sold last

year, or an increase of 60-65 lakh packets.

Dramatic increase in cotton prices this year too is likely to make farmers to come back to the crop.

After a disastrous season the previous year, cotton prices touched ₹6,100 a quintal at the peak in

September 2016, as against ₹1,500-2,000 in September 2015. Those grew cotton this season

reaped good returns.

However, farmers found pulses hard to be remunerative. “We expect a big shift in North India.

Cotton will make a return in those areas. Those farmers who shifted to pulses over the last three

years because of higher prices of those commodities, will come back to cotton as prices have

fallen,” P Satheesh Kumar, former president of Seedsmen Association of Andhra Pradesh, told

BusinessLine.

Though the industry pegged sales of 4.40 crore packets in the beginning of the season in 2016,

actual numbers showed that farmers consumed only 3.60 crore packets because of increased

interest among farmers in pulses. In the Telangana, it was redgram that made a dent into cotton

area, along with pulses in some areas.

The north consumed 50-55 lakh packets as against the normal acreage of 80 lakh packets. The

industry expects a consumption level of 75 lakh packets in the region. Cotton acreage fell down to

about 103 lakh hectares in 2016-17 from 116 lakh ha in 2015-16, resulting in a drop of production

to 351 lakh bales from 338 lakh bales during the period.

The area saw a peak in 15 years in 2014-15 as farmers grew cotton in a record 128.46 lakh ha that

year. This resulted in a bounty for the cottonseed industry. It registered sales of over 5 crore

packets that year. We have been seeing a decline ever since.

This time, however, the industry foresees a re-bound of interest in cotton. This is despite huge

number of deaths reported in cotton-growing areas in seven States.

With pink bollworm developing resistance to Bollgard-II technology and attractive prices in other

crops resulted in a drop of area in the last two years.

“Though we don’t expect it to grow to the highest level, the acreage would certainly grow by at

least 20 per cent,” Satheesh said.

Inventory

The industry sees no problem in the availability of seeds. “There are no issues on (seed)

production front. There were good rains and irrigation facilities. The industry has good

inventories too to back up,” Satheesh said.

Jaipal, a farmer from Warangal, said favourable weather in 2016 and a good market helped

farmers get good prices. “The Centre had asked the farmers not to grow cotton keeping in view a

very bad season in the previous year. Fear of poor performance of Bt cotton too, made some

farmers keep off from cotton. But favourable weather has changed it all. We got good prices this

time and we hope the trend will continue next year as well,” he said.

Source:http://www.thehindubusinessline.com/economy/agri-business/cotton-set-to-

make-comeback-as-pulses-disappoint-growers/article9485512.ece

January 15, 2017

Cotton blooming but correction likely

Increased supply may change the dynamics in the second half of the cotton year

So far, 2017 has been good for cotton with future prices rising 10 per cent or so in the last two weeks onrenewed hope of buying as the impact of demonetisation recedes, on fears of supply shortage and procurement support from the Cotton Corporation of India (CCI).

Globally, cotton traded firm in the first half of cotton year 2016/17 (August-July), hit a near five-month high (75 cents/lb) on January 5 because of supply shortage as the bulk of the crop was still being harvested. Of late, the expectation of reduced supply from India has added to the positive sentiment. However, things may change in the second half of the cotton year on increased supply, leading to a correction in prices. The downside may, however, be capped on strong recovery in the US economy and rising income in developing countries.

Global factors

According to the International Cotton Advisory Committee (ICAC), 2016-17 is expected to begin with a carry-forward stock of 19.3 million tonnes (mt) while production is estimated at 22.8 mt (up 8 per cent year-on-year), putting the total supply for the year at 42.1 mt against a consumption demand of 24.1 mt. Thus, 2016-17 is likely to end a closing stock of 17.9 mt, down 7 per cent from 2015-16. However, the global stock-to-use ratio (excluding China) is expected to increase from 50 per cent to 53 per cent, putting moderate pressure on cotton prices in the second half.

Barring China, higher production is expected from othertop producers such as India, the US, Pakistan, Brazil, and Australia. The US is expected to produce 3.6 mt due to improved weather, enhanced yields and better crop acreage. Crackdown on pink bollworm is likely to improve output in Pakistan, but it will still be below the average. Production in Australia and Brazil, the keyexporters , is likely to increase by 64 per cent and 10 per cent, respectively.

China no longer price driver

China is expected to produce 4.55 mt of cotton in 2016-17 against 4.75 mt in 2015-16. China is still holding inventory of more than a year and will resume the next round of cotton sales from domestic reserves on March 6, with daily sales volume set at 30,000 tonnes.

The USDA expects China toimport slightly more cotton in 2016-17 to 0.98 mt. It imported only 54,900 tonnes of cotton in November, down by 35 per cent (year-on-year) while for 2016 as a whole import is down 42 per cent to 0.75 mt.

Competition from polyester

Expectations of an improved global economy and thus better prospects forclothing demand will always provide the underlying support to cotton prices but prices of polyester fibre will remain a key factor in determining cotton prices. Polyester prices have increased a bit recently, with increase in crude oil prices post OPEC deal on production.

Domestic factors

The current firmness in Indian cotton prices is seen because of slower arrivals impacted by demonetisation and fears of supply shortage despite estimate of increased cotton production by the Cotton Association of India (CAI) at 34.5 million bales (1 bale =170 kg) of cotton in 2016-17 (October-September) compared to 33.8 million bales in 2015-16.

According to the Cotton Corporation of India, the season’s total arrival till December’16 has reached 7.5 million bales, a drop of 25 per cent to that in 2015.

However, the uncertainty over production figures remains because of the reduction in acreage by over10 per cent. The private participants are expecting lower production at 31-31.5 million bales. The procurement support from CCI, after a gap of four years, to procure 0.15 million bales of cotton in the year ahead is expected to strengthen demand. At the same time, with more money coming into people’s pockets (waning impact of demonetisation) creating more demand is likely to be somewhat balanced with increased arrival pressure restricting the extent of upside.

India’sexport of cotton is expected to fall by 34 per cent to 0.82 mt in 2016-17 due to demonetisation-led squeeze in supply when prices were running low and now with domestic prices running high, exports should be lower.

Outlook

Cotton is likely to trade steady on an expected shortfall in production, coupled with procurement support from CCI and improved domestic buying with more cash in hand. However, a likely increase in cotton arrivals, cheaper imports and not-so-bright export prospects will limit the extent of upside.

Source:http://www.thehindubusinessline.com/portfolio/real-assets/cotton-blooming-but-correction-likely/article9481526.ece

January 14th, 2017

KARACHI: Cotton trading was brisk on Friday as buyers remained in the forefront

for second consecutive session. The short supply of quality cotton and little

pro­s­p­ects of importing costly cotton from India caused panic buying.

There was strong demand for quality cotton which was in short supply and this further caused

panic in the trading ring.

The quality cotton prices have risen by Rs100 and touched a seasonal high of Rs6,700 per maund

(around 37 kilograms). Prices of low- and medium-quality cotton also moved higher and were

being quoted at around Rs6,000 per maund.

However, New York cotton and Chinese markets closed lower after US Department of Agriculture

reported exp­o­rts fell during the outgoing month. But some analysts say that strong dollar has

hit cotton exports.

The Karachi Cotton Association raised its spot rates by Rs25 to Rs6,375 per maund. Major deals

on the ready counter were: 1000 bales from Sanghar (done at Rs5,600 to Rs6,000), 2,100 bales

Ghotki (Rs6,600), 876 bales Dharki (Rs6,450), 500 bales Faqirwali (Rs6,525), 1,200 bales

Haroonabad (Rs6,550), 1,000 bales Fort Abbas (Rs6,550 to Rs6,600), 6,000 bales Rahimyar

Khan (Rs6,600 to Rs6,700), 1,857 bales Sadiqabad (Rs6,625 to Rs6,700), 1,800 bales Yazman

Mandi (Rs6,700) and 2,000 bales Lodhran (Rs6,700).

Source:http://www.dawn.com/news/1308236/cotton-price-up-on-higher-demand

January 13, 2017

COTTON EXPORTERS IN A FIX AS PRICES SURGE AMID SPECULATION

Prices of the fibre up by ₹2,500 per candy within ashort span of a week to touch ₹42,500

AHMEDABAD

Sharp surge in cotton prices has left exporters in a lurch with prices touching ₹42,500 per candy (each of 356 kg). While the Cotton Corporation of India (CCI) has given an upward crop estimate of 351 lakh bales, exporters hold speculators responsible for the artificial rally in the fibre crop.

Export prospects hurt

“The prices have surged by about ₹2,500 per candy within a short span of a week to touch ₹42,500. This happens at a time of peak arrival season and good crop outlook. There is no short supply in the market, but prices continue to head north, which is hurting the export prospects,” said an exporter from Gujarat. Insiders maintained that as many as 200,000 bales (of 170 kg each) were committed for exports . “But at this price, procurement isn’t possible and we can’t make new export commitment,” the exporter stated.

However, some exports have taken place at the rate of 82 cents, which works out to ₹42,000/candy. “But that is very low quantity. The rally is primarily due to speculation of a short supply,” a ginner from Kadi informed.

On the MCX futures, prices of the fibre had touched ₹20,270 per bale, which works out to ₹42,447 per candy on Friday.

Ample supplies

According to ginners, cotton availability is ample and there was no fundamental reason for the short-term rally.

“There were issues during the first two months of demonetisation. Farmers were not bringing the crop because of the lack of liquidity. But the condition has improved now, but arrivals haven’t,” the ginner stated.

Amid surging cotton prices, farmers anticipate higher return for the crop, i.e. raw cotton or kapas. Kapas had touched ₹1,100 per 20 kg or ₹5,500 a quintal. “Many farmers anticipated realisation to further go up, hence held back the crop, causing an artificial rally,” an expert said here.

Source: http://www.thehindubusinessline.com/economy/agri-business/cotton-exporters-

in-a-fix-as-cotton-prices-surge-amid-speculation/article9479292.ece

JANUARY 13,2017

Low cotton arrival ahead of Sankranti festival

RAJKOT

Cotton markets witnessed fall in arrival due to festival mood for Makar Sankranti festival that is on January 14. Price remained steady on limited demand. Trader said that as against 40,000 bales, cotton arrival reported lower by 8,000 bales to 32,000 bales in Gujarat .

Mills demand was limited andexporters were not too active in the market. Gujarat Sankar-6 cotton traded at ₹42,000-42,300 per candy of 356 kg. About 32,000 bales arrived in Gujarat, 50,000 bales in Maharashtra and 1.44 lakh bales in India.

At this time in 2016, cotton arrival was about 2 lakh bales. Kapas or raw cotton decreased by ₹5 to ₹1,110-1,120 per 20 kg and gin delivery kapas was stood at ₹1,120-1,175 per 20 kg. Cotton seed remained flat at ₹525-555 per 20 kg.

source: http://www.thehindubusinessline.com/markets/commodities/low-cotton-arrival-

ahead-of-sankranti-festival/article9479300.ece

JANUARY 13, 2017

SIMA seeks measures to bring down adulteration in cotton

The Southern India Mills’ Association has appealed to the Union Textile Minister to intervene and

urge the Gujarat Government to take steps and control adulteration in cotton ginned in that State.

Chairman of the association M. Senthil Kumar has said in a press release, textile mills in Tamil

Nadu purchase over 100 lakh bales of cotton and only five lakh of this is from Tamil Nadu.

The Shankar-6 variety, which comes from Gujarat, is among the popular varieties bought by the

mills as it is suitable to produce hosiery yarn for the garment sector.

For the last few years, the textile mills in the south are facing problem of adulteration in the cotton

purchased from Gujarat as cotton waste is mixed with raw cotton.

The industry took up the issue with the Gujarat Government and the Gujarat Ginners’ Association

in December last year. But, there is no action.

Hence, the mills are reducing purchases from Gujarat. The units are, instead, sourcing from States

such as Telangana and also importing from African countries. Cotton imports went up last season

to 23 lakh bales from the usual five to six lakh bales.

The Union Textile Minister should persist with the Gujarat Government and industry to bring

down the adulteration levels, he added.

Source: http://www.thehindu.com/news/cities/Coimbatore/SIMA-seeks-measures-to-

bring-down-adulteration-in-cotton/article17033757.ece

JANUARY 13/1/2017

Sharp surge in cotton prices has left exporters in a lurch with prices touching ₹42,500 per candy (each of 356 kg). While the Cotton Corporation of India (CCI) has given an upward crop estimate of 351 lakh bales, exporters hold speculators responsible for the artificial rally in the fibre crop. Export prospects hurt “The prices have surged by about ₹2,500 per candy within a short span of a week to touch ₹42,500. This happens at a time of peak arrival season and good crop outlook. There is no short supply in the market, but prices continue to head north, which is hurting the export prospects,” said an exporter from Gujarat. Insiders maintained that as many as 200,000 bales (of 170 kg each) were committed for exports. “But at this price, procurement isn’t possible and we can’t make new export commitment,” the exporter stated. However, some exports have taken place at the rate of 82 cents, which works out to ₹42,000/candy. “But that is very low quantity. The rally is primarily due to speculation of a short supply,” a ginner from Kadi informed. On the MCX futures, prices of the fibre had touched ₹20,270 per bale, which works out to ₹42,447 per candy on Friday. Ample supplies According to ginners, cotton availability is ample and there was no fundamental reason for the short-term rally. “There were issues during the first two months of demonetisation. Farmers were not bringing the

crop because of the lack of liquidity. But the condition has improved now, but arrivals haven’t,”

the ginner stated.

Amid surging cotton prices, farmers anticipate higher return for the crop, i.e. raw cotton or kapas.

Kapas had touched ₹1,100 per 20 kg or ₹5,500 a quintal. “Many farmers anticipated realisation to

further go up, hence held back the crop, causing an artificial rally,” an expert said here.

January 13, 2017

Low cotton arrival ahead of Sankranti festival

RAJKOT, JANUARY 13:

Cotton markets witnessed fall in arrival due to festival mood for Makar Sankranti festival that is

on January 14. Price remained steady on limited demand. Trader said that as against 40,000

bales, cotton arrival reported lower by 8,000 bales to 32,000 bales in Gujarat .

Mills demand was limited and exporters were not too active in the market. Gujarat Sankar-6

cotton traded at ₹42,000-42,300 per candy of 356 kg. About 32,000 bales arrived in Gujarat,

50,000 bales in Maharashtra and 1.44 lakh bales in India.

At this time in 2016, cotton arrival was about 2 lakh bales. Kapas or raw cotton decreased by ₹5

to ₹1,110-1,120 per 20 kg and gin delivery kapas was stood at ₹1,120-1,175 per 20 kg. Cotton seed

remained flat at ₹525-555 per 20 kg.

Source: http://www.thehindubusinessline.com/markets/commodities/low-cotton-arrival-

ahead-of-sankranti-festival/article9479300.ece

January 12, 2017

Mills claim adulteration in Gujarat cotton, petition Irani

Spinning mills in southern India have complained that the cotton purchased from Gujarat is

adulterated and causing problems.

The textile mills used to import five to six lakh bales of cotton to meet the customers’

requirements.

Spinning mills in southern India have complained that the cotton purchased from Gujarat is

adulterated and causing problems. The mills claimed that the section of ginners in Gujarat are

mixing cotton waste (comber noil-waste extracted by spinning mills) in the virgin cotton with a

profit motive, which they claimed not only impact the image of Gujarat, a major producer and

supplier of quality cotton in the country, but also the strenuous efforts put in by the farmers.

In a statement on Wednesday, Southern India Mills Association (SIMA), said that despite the

problems faced on many fronts, the only advantage for the predominantly cotton-based textile

industry is availability of home grown cotton. The textile mills in southern states mainly depend

on cotton from states like Gujarat, Maharashtra for the consumption. These mills mainly prefer

Shankar 6 variety of cotton grown in Gujarat as it is suitable to produce hosiery yarn for garment

sector, especially Tirupur. Among the southern states, Tamil Nadu alone consumes more than 120

lakh bales of cotton annually while producing only around 5 lakh bales.

M Senthilkumar, chairman, SIMA, said the industry has been facing the problem of adulteration

for the last few years and the magnitude has become several fold from the last cotton season. This issue was brought to the notice of the agriculture minister of Gujarat state and the Gujarat Ginners

Association in December 2015.

However, there was no action on the part of Gujarat government.

As a result, the textile mills have reduced the volume of purchase from Gujarat by 40-50% and

are sourcing from Telangana besides importing from countries like West Africa and Australia.

Normally, the textile mills used to import five to six lakh bales of cotton to meet the customers’

requirements, especially the Extra Long Staple (ELS) cotton.

But in the last cotton season, due to adulteration problem, 23 lakh bales of cotton were imported

incurring cost towards foreign exchange of Rs 3,600 crore for the additional 17 lakh bales, he said.

“Since the adulteration problem has still been persisting, the association on Wednesday sent a

representation to the union textile minister Smriti Irani, requesting her intervention and prevail

on the Gujarat government to take necessary steps to curb the adulteration practice followed by

certain section of the ginners in the state in the interests of cotton farmers, traders, spinners and

also the knitted garment manufacturers across the nation,” he said.

Source: http://www.financialexpress.com/economy/mills-claim-adulteration-in-gujarat-

cotton-petition-irani/504745/

January 10, 2017

Outlook remains bullish for cotton Cotton prices have begun the New Year with a bang. After being stuck in a narrow range all through December, cotton prices broke above a key resistance point by surging higher. The cotton futures contract traded on the Multi Commodity Exchange (MCX) is up about 6 per cent and is currently trading near ₹20,120 per bale. Cotton prices were on a strong downtrend in the second half of 2016. The MCX cotton contract recorded a peak of ₹23,990 in July and tumbled to a low of ₹18,270 in November. However, the downtrend halted at this low and reversed higher from there. After consolidating in a sideways range in December, the prices have resumed their upmove. Along with restricted arrivals, the Cotton Corporation of India’s decision to purchase at market price from various parts of the country has also aided this price reversal. The recent rally eases the downtrend that was in place between July and November last year and also signals a trend reversal. Medium-term view The outlook is bullish. The 21-day moving average is turning around and is signalling a cross-over above the 200- and 100-day moving averages in the coming days. This strengthens the bullish view and suggests that the downside could be limited in the short- term. There is strong support in the ₹19,500-₹19,200 band. Though an intermediate dip to test this support region cannot be ruled out, a break below this support zone is unlikely. Immediate resistance is at ₹20,443. A strong break above this hurdle can take the contract higher to ₹21,120 — the 50 per cent Fibonacci retracement resistance point. Traders with a medium-term perspective can make use of dips to go long near ₹20,000. A stop-loss can be placed at ₹19,350 for the target of ₹21,000. Accumulate longs on dips near ₹19,500. Revise the stop-loss higher to ₹20,150 as soon as the contract moves up to ₹20,650. Source: http://www.thehindubusinessline.com/markets/commodities/outlook-remains-bullish-for-cotton/article9471494.ece

RAJKOT, JANUARY 9:

Cotton blooms on supply crunch

Cotton prices continued to moved up on the back of tight supply and rising demand from domestic mills.Export enquiries too supported the trend. Gujarat Sankar-6 cottontraded up by ₹100 to ₹41,000-41,300 per candy of 356 kg.

About 1.44 lakh bales (of 170 kg) arrived all over India. Kapas increased by ₹5 to ₹1,050-1,120 per 20 kg and gin delivery kapas at ₹1,120-1,150. Cottonseed gained ₹10 to ₹515-525 per 20 kg.

Source:http://www.thehindubusinessline.com/markets/commodities/cotton-blooms-on-

supply-crunch/article9468893.ece

January 6, 2017

Global cotton prices likely to fall in second half of season

AHMEDABAD, JANUARY 6:

Citing higher cotton supply scenario for the season 2016-17, the International Cotton Advisory Committee (ICAC) has hinted towards a bearish trend in the prices for the fibre in the second half of the year.

The ICAC Secretariat has forecast the season-average for Cotlook A Index in 2016-17 (starting October-September) will range between 66 and 83 cents per lb, with a midpoint of 74 cents/lb, which would be 4 cts/lb higher than last season.

But the world cotton production in 2016-17 is likely to rise by 8 per cent to 22.8 million tonnes (mt) and the world consumption is likely to remain stable at 24.1 mt , which may put pressure on the prices in the latter half of the season, the ICAC noted.

World ending stocks may fall by 7 per cent to 18 mt in 2016-17, though stocks outside of China are expected to grow by 6 per cent to 8.7 mt .

According to ICAC, the current season began with lower stocks, particularly from countries in the Southern Hemisphere, which saw ending stocks in 2015-16 fall by 21 per cent to 1.6 mt , the lowest since 2009-10.

The shortage in supply carried through the first few months of 2016-17 season thereby keeping the prices firm.

Indian picture

In Gujarat — one of the key producers of the commodity in India — prices for raw cotton hovered in the range of ₹5,500-5,670 a quintal inching towards new record.

Traders cited the reduced arrivals and cash shortage in the banks as the reason for the rally in the cotton prices, whereas most believed that the rally may not continue longer on good production.

ICAC predicts India’s cotton production to increase by 4 per cent to just under 6 mt , making it the world’s largest producer.

Source: http://www.thehindubusinessline.com/economy/agri-business/global-cotton-prices-likely-to-fall-in-second-half-of-season/article9464443.ece

January 5, 2017

Cotton rates firm on Cotton Corporation of India intervention

Cotton prices have moved up and the market sentiment has improved with the Cotton Corporation of India (CCI) resorting to purchase of the commodity at commercial rates from different parts of key cotton growing regions in the country.

Cotton prices have moved up and the market sentiment has improved with the Cotton Corporation of India (CCI) resorting to purchase of the commodity at commercial rates from different parts of key cotton growing regions in the country.

According to top officials of CCI, prices have now firmed up to R41,500 per candy from the prevailing rates of R38,000 and farmers are now beginning to get better rates from traders.

International rates are currently at R42,000 per candy. CCO has stepped in to protect the interests of farmers and industry, M M Chokhalingam, CMD (in-charge) said.

CCI has purchased 10,000 bales so far and for the last couple of days has been going slow on purchases because rates have improved, he said. This is the first time after a gap of four years that CCI has stepped in to make commercial purchases.

Chokalingam said the Corporation will step in aggressively if the market rates slip down and it shall remain for the entire season. The Corporation expects to purchase around 15 lakh bales for the season of 2016-17.

In the start of the season, cotton prices were ruling between R5,000 and R5,200 per quintal in various markets while Minimum Support Price (MSP) was at R4,160 per quintal.

However, prices dropped down later because of which the CCI intervention helped, he said.

Chokhalingam pointed out that CCI now uses the e-purchase and e-sale modes for sale and purchase of cotton and therefore had called for bids through e-auction.

Apart from MSP operations, CCI also has to perform commercial operations at times in the interests of the farmers and to keep the market stable. If CCI does not have stocks then traders can control markets and bring out cotton during lean season,” he explained.

“The intent of the CCI is to ensure that this does not happen and keep prices uniform. Instead, CCI will purchase some 15-20 lakh bales of kapas and make it available to the industry in times of need,” he said.

CCI has been purchasing kapas or raw cotton from markets wherever the prices are lower, Chockalingam said, adding that the commercial purchase of up to 15 lakh bales would be mainly from the west, central and southern parts of the country as prices in the northern markets are ruling much higher.

Meanwhile, the Maharashtra State Cooperative Cotton Growers Federation has urged both the state and the Centre seeking permission to purchase cotton from farmers at commercial rates.

We are usually the sub-agents for CCI and have been purchasing cotton at MSP rates but this time the prices are higher and therefore we would like to purchase at market rates, N P Hirani, chairman of the federation said.

Chokhalingam said that the Corporation has authorised the federation to make purchases. It is only private groups that have been told to register as buyers or sellers, he clarified.

The Centre had declared an MSP of R4,160 per quintal for the current season for the long staple fibre and R3,860 for the medium staple length. Besides protecting cotton growers’ interests, CCI caters to the needs of its customers, such as the National Textiles Corporation and several co-operative mills. It also meets the demand of private sector mills, mainly during the lean season, by releasing the fibre from its stocks.

Over the last three-four years, CCI has stepped into the markets to protect farmers when prices fell below the minimum support price (MSP) levels. Although Indian cotton acreage had dropped by close to a tenth this year to around 110 lakh hectares higher yields, on account of widespread rains in key producing states, it is expected to help maintain output.

Source: http://www.financialexpress.com/market/commodities/cotton-rates-firm-on-cotton-corporation-of-india-intervention/497037/

January 2, 2017

RAJKOT, JANUARY 2:

Cotton prices moved up on the back of rising demand from domestic mills. Moreover, goodexport enquiries and tight supplies at the producing States have supported the cotton price to increase on

Monday.

Traders said at present, cotton supply is tight and domestic mills’ demand increased which lifted cotton prices. On the other hand, enquiries fromexporters are higher. Gujarat Sankar-6 cotton was up ₹100 to ₹39,900-40,200 per candy of 356 kg.

About 22,000 bales of 170 kg arrived in Gujarat and 1.35 lakh bales arrived in India. Kapas or raw cotton traded up on strong demand for cottonseed from oil millers. Kapas gained ₹10 to ₹1,040-80 per 20 kg and gin delivery kapas stood at ₹1,080-1,120. Cottonseed traded up by ₹10 to ₹480-520 per 20 kg.

Source:http://www.thehindubusinessline.com/markets/commodities/cotton-edges-up-on-

rising-demand/article9455417.ece