The Cotton Association of India notes with disappointment the movement by certain sectors of the cotton chain to restrict and even ban Cotton exports. Such recommendations if implemented would bring the country back to the pre-liberalisation era of the 1980’s and early 1990’s.
Any such move will adversely affect the interest of the nation in general and that of the Indian farmer in particular. While the Indian farmer has the protection of a guaranteed MSP, this should not be the reason to prevent him realising a value for his produce which is equal to his counterpart in USA, China, Uzbekistan or several African nations.
India is expected to produce 305 lakh bales and import 7 lakh bales in the 2009-10 season and therefore despite exporting close to 70 lakh bales, after providing for domestic consumption of 240 lakh bales the season will end with a closing stock of around 73.50 lakh bales which will provide for a healthy 3.5 months of consumption.
Local prices have risen lately only in reaction to high prices in the international markets which have gone up by around 15 % in the last one month. It is noteworthy that Indian prices have gone up by less than 10% in the same period.
Unreasonably pessimistic estimates of the crop in a season which has witnessed the highest cotton acreage in history ( 100 lakh hectares) will only cause panic in the market and lead to higher prices.
Despite the rise in prices locally, Indian mills continue to get cotton cheaper than almost any of their counterparts in the world. Over and above this Indian mills have the option to import cotton without any restrictions and nil import duty unlike their competing counterparts in other countries for eg. China where mills have to face quota restrictions, duties and local taxes to import cotton.
It is highly inappropriate that when the spinning industry does not possess adequate capacity to process all the raw cotton produced in the country it should propose any restriction on export of the available surplus. Such a step would only result in the Indian farmer subsidising the Indian spinner.
The theory of ‘value added’ being raised is self contradicting. While cotton is the raw material to make yarn which is spun from it, yarn itself is the raw material for fabric and garments. Both yarn and fabric continue to be freely exportable. However, if one goes by the ‘value added’ theory this should not be the case.
Cotton acreage which has seen a rising trend recently will receive a setback if farmers do not receive a fair price as per international levels as a result of the proposed restrictions on exports.
Reports emerging from the upcountry markets show that this year is again going to see a high quality crop which will be available till the end of the season.
The country is likely to see a very comfortable stock to use ratio of 0.24 at the end of the season. While comparing the ratios with that of other countries one needs to bear in mind that India is a cotton producing country unlike Bangladesh, Taiwan etc which do not produce any cotton. Again India is a net exporting country unlike China, Pakistan or Turkey which are all net importing countries. Also the ratio for India pertains to the October-September period in comparison to the International norm of August-July period. In fact of late, cotton begins to arrive in India even before the statistical season commences on 1st October.
All in all the cotton season 2009-2010 promises to be one with a comfortable position of availability both for the domestic and export markets.
Showing posts with label cotton. Show all posts
Showing posts with label cotton. Show all posts
Friday, November 13, 2009
Tuesday, October 27, 2009
Latest Cotton Estimate
Cotton Association of India (CAI) released its September estimates (as on 30th September 2009) of the Cotton Crop for the season 2009-10. CAI estimated the Cotton Crop for the new season at 312.75 lakh bales, marginally higher than last months estimates. The projected Balance Sheet drawn by the CAI for the year 2009-10, estimated the total cotton supply at 391.25 lakh bales, while the domestic consumption was estimated at 250.00 lakh bales, thus leaving a surplus of 141.25 lakh bales. The CAI estimated the cotton exports during 2009-10 season at 70.00 lakh bales. A statement containing the State-wise estimates of Crop and Balance Sheet for the season 2009-10 is enclosed.The impact of flood situation in the States of Andhra Pradesh and Karnataka has not been severe. Yield is a cause of concern because of erratic rains although any decrease in yield is likely to be made up by historical high acreage under cotton close to 100 lakh hectares. Even with higher exports estimated for this season, carry-over stock at the end of the season would be quite comfortable resulting in one of the highest stock-to-use ratio in recent times.
Monday, April 6, 2009
CCI offloads 55 lakh bales cotton
Cotton Corporation of India (CCI) has so far offloaded about 55 lakh bales (each of 170 kg) thanks to bulk discount offer scheme with advantage of longer delivery period and supported by good buying from mills and ginners.
The corporation has so far procured about 88 lakh bales for the current season, nearly 30% of the national estimated crop. Last month, the Cotton Advisory Board (CAB) lowered its output estimate to 290 lakh bales from the earlier 322 lakh bales due to delayed sowing and erratic monsoon.
“We have so far achieved sales volume of about 55 lakh bales because of our bulk discount offer. I think sales may slowdown in the days to come as majority of mills have covered its requirement as they generally buy cotton for 2-3 months’ consumption,” said a top CCI official, who did not wish to be quoted.
“The corporation is offering a cash discount of Rs 400 per candy (each of 356 kg) on bulk purchases between 10,000 and 25,000 bales and also providing Rs 450 per candy on the buying between 25,000 and 50,000 bales. Similarly, millers are getting a discount of Rs 500 per candy on bulk purchases between 50,000 and 2 lakh bales and Rs 650 per candy on purchase of 2 lakh bales or more,” an official said.
During the current month, CCI has increased its sale prices by Rs 700-1,000 per candy on sustained buying interest by mills amid reduced arrivals at the major cotton trading centres.
“CCI has suspended the sales of two major varieties, Gujarat Sankar-6 and Maharashtra Bunny. As a result, private ginners may shift their buying to the open market,” a leading cotton trader said.
Total arrivals of raw cotton in the country have so far reached to 250 lakh bales.
“Daily arrivals across the country have come down to 90,000 bales. There are some buying interests from southern mills. I expect traders have struck deals to import at least 16-17 lakh bales so far and nearly 13 lakh bales have already arrived in the market,” Kishor Shah of M/s Shree Rang Cotton said.
“The government has hiked MSP in cotton for this season. As a result, domestic cotton prices are ruling higher than international markets. I believe imports will increase substantially and export will not be possible under the present scenario,” he added. Cotton price may remain steady in the next few days and S-6 may hover around Rs 21,000-21,500 per candy, he said. Sankar-6 and Kalyan V-797 in Gujarat are quoted around Rs 21,500 and Rs 15,500 per candy, respectively. (Source: Financial Express)
The corporation has so far procured about 88 lakh bales for the current season, nearly 30% of the national estimated crop. Last month, the Cotton Advisory Board (CAB) lowered its output estimate to 290 lakh bales from the earlier 322 lakh bales due to delayed sowing and erratic monsoon.
“We have so far achieved sales volume of about 55 lakh bales because of our bulk discount offer. I think sales may slowdown in the days to come as majority of mills have covered its requirement as they generally buy cotton for 2-3 months’ consumption,” said a top CCI official, who did not wish to be quoted.
“The corporation is offering a cash discount of Rs 400 per candy (each of 356 kg) on bulk purchases between 10,000 and 25,000 bales and also providing Rs 450 per candy on the buying between 25,000 and 50,000 bales. Similarly, millers are getting a discount of Rs 500 per candy on bulk purchases between 50,000 and 2 lakh bales and Rs 650 per candy on purchase of 2 lakh bales or more,” an official said.
During the current month, CCI has increased its sale prices by Rs 700-1,000 per candy on sustained buying interest by mills amid reduced arrivals at the major cotton trading centres.
“CCI has suspended the sales of two major varieties, Gujarat Sankar-6 and Maharashtra Bunny. As a result, private ginners may shift their buying to the open market,” a leading cotton trader said.
Total arrivals of raw cotton in the country have so far reached to 250 lakh bales.
“Daily arrivals across the country have come down to 90,000 bales. There are some buying interests from southern mills. I expect traders have struck deals to import at least 16-17 lakh bales so far and nearly 13 lakh bales have already arrived in the market,” Kishor Shah of M/s Shree Rang Cotton said.
“The government has hiked MSP in cotton for this season. As a result, domestic cotton prices are ruling higher than international markets. I believe imports will increase substantially and export will not be possible under the present scenario,” he added. Cotton price may remain steady in the next few days and S-6 may hover around Rs 21,000-21,500 per candy, he said. Sankar-6 and Kalyan V-797 in Gujarat are quoted around Rs 21,500 and Rs 15,500 per candy, respectively. (Source: Financial Express)
Saturday, February 28, 2009
Nafed to sell cotton on NSEL platform
Mumbai: The National Agricultural Cooperative Marketing Federation (Nafed) has decided to offer cotton through online spot trading system, the National Spot Exchange Ltd (NSEL). The federation has so far sold about 2,500 bales averaged around Rs 20,000 per candy valued at Rs 3 crore - Rs 4 crore through the online platform and may gear up for the sale from next week.
“The federation has so far procured total of about 35 lakh bales from states including Maharashtra, Gujarat and Andhra Pradesh. We will continue to sell cotton through all methods including online trading. Small buyers have a good option to buy through online platform as there is no competition on sales up to 10,000 bales,” said UKS Chauhan, managing director, Nafed said. This week, cotton sales has evoked good response as the major buyers in the contracts were Vardhman Mills, JG Spinning Mills, GIMA Textiles and exporter Ram Gopal Ramesh Kumar.
“The spot contracts in which sale transactions happened were Wani, Aurangabad and Nagpur delivery contracts. Since Nafed stock is lying at CWC (Central Warehousing Corporation) or SWC (State Warehousing Corporation) warehouses, the same warehouses have been designated as delivery centers of NSEL. Hence, Nafed does not incur any expenses on transportation; rather it is sold on ex-warehouse basis from existing locations,” Anjani Sinha, managing director, NSEL, said. NSEL has launched 11 contracts for Maharashtra, 3 contracts each for Gujarat and Andhra Pradesh.
“We have started participating in NSEL. We want to experiment with this new initiative. I believe the future of commodity trading lies in such electronic markets only.This will help us in reducing our cost of procurement as well as eliminating all counter party risks,” an official of a leading export house said. (source: financial express)
“The federation has so far procured total of about 35 lakh bales from states including Maharashtra, Gujarat and Andhra Pradesh. We will continue to sell cotton through all methods including online trading. Small buyers have a good option to buy through online platform as there is no competition on sales up to 10,000 bales,” said UKS Chauhan, managing director, Nafed said. This week, cotton sales has evoked good response as the major buyers in the contracts were Vardhman Mills, JG Spinning Mills, GIMA Textiles and exporter Ram Gopal Ramesh Kumar.
“The spot contracts in which sale transactions happened were Wani, Aurangabad and Nagpur delivery contracts. Since Nafed stock is lying at CWC (Central Warehousing Corporation) or SWC (State Warehousing Corporation) warehouses, the same warehouses have been designated as delivery centers of NSEL. Hence, Nafed does not incur any expenses on transportation; rather it is sold on ex-warehouse basis from existing locations,” Anjani Sinha, managing director, NSEL, said. NSEL has launched 11 contracts for Maharashtra, 3 contracts each for Gujarat and Andhra Pradesh.
“We have started participating in NSEL. We want to experiment with this new initiative. I believe the future of commodity trading lies in such electronic markets only.This will help us in reducing our cost of procurement as well as eliminating all counter party risks,” an official of a leading export house said. (source: financial express)
Saturday, February 14, 2009
Cotton body lowers output, demand estimate
Confirming the woes of the cotton economy, the Cotton Advisory Board (CAB) has lowered both the production and demand estimate for the crop season 2008-09 at its meeting held in Mumbai on Friday.
Cut 9%
The production estimate for 2008-09 was lowered by 9 per cent to 340 lakh bales (lb) against 369 lb recorded last year.
Demand was expected to fall sharper by 16 per cent to 280 lb in the year under review against 326 lb registered last year. Reeling under the economic slowdown, mill consumption may fall 4 per cent to 195 lakh bales (203 lakh bales), while that of small scale units was likely to drop 15 per cent to 20 lakh bales (23 lakh bales), according to CAB estimates.
Mr A.B. Joshi, Textile Commissioner, Maharashtra, said apart from unfavourable climatic condition and marginal fall in acreage, the production was affected by red leaf syndrome in some of the States.
Acreage down
Area under cotton cultivation fell marginally to 93.73 lakh hectares (lh) (94.39 lh) as the northern zone registered a drop of 34 per cent to 12.15 lh (14.26 lh). Punjab recorded 11 per cent dip in acreage at 5.37 lh (6.04 lh), Haryana 5.80 per cent to 4.55 lh (4.83 lh) and Rajasthan 34 pr cent at 2.23 lh (3.39 lh).
Cotton coverage in the central zone (Gujarat, Maharashtra and Madhya Pradesh) was down marginally by 0.66 per cent at 62.05 lh (62.46 lh), while in the southern zone including Andhra Pradesh, Karnataka and Tamil Nadu it was up 12 per cent at 18.55 lh (16.59 lh).
AREA UNDER BT
Area under Bt cotton has increased substantially in all the nine States and occupies 69 lh which accounts for 73 per cent of total area covered.
Production in all the States fell sharply except for the southern zone which registered an increase of 13.56 per cent to 67 lb (59 lb). Led by the 20.45 per cent dip in production in Punjab to 17.50 lb (22 lb), the northern zone witnessed a fall of 17 per cent to 39 lb (47 lb). Haryana production was down 12.50 per cent at 14 lb (16 lb) and Rajasthan it dropped 16.67 per cent to 7.50 lb (9 lb).
In Gujarat and Maharashtra the production was down 19.65 per cent and 14.29 per cent to 90 lb (112 lb) and 18 lb (21 lb), while it was static in Maharashtra at 62 lb.
The southern zone recorded a rise of 13.56 per cent in production at 67 lb (59 lb).Yield low
Yield per hectare in Punjab was down 10.53 per cent to 554 kg/hectare (kph) (619 kph), Gujarat 19.48 per cent at 633 kph (786 kph) and Madhya Pradesh 17.56 per cent to 467 kph (567 kph). Yield in Karnataka was higher by 16 per cent at 392 kph (338 kph). Overall the yield was down 7.29 per cent at 526 kph (567 kph).
Cotton Corporation of India has procured about 71 lakh bales as on January-end, while it has sold 12 lakh bales, said Mr S.C. Grover, Chairman and Managing Director, Cotton Corporation of India.
Exports estimate
CAB has lowered the exports estimate by 70 per cent to 50 lb against 85 lb recorded last year. The textile commissioner office has registered request for export of 11 lb while only 7 lb was shipped. Expressing confidence that the export target of 50 lb will be achieved, Mr Joshi said the country is getting good orders from China, Bangladesh and Pakistan. (Source: The Hindu BusinessLine)
Cut 9%
The production estimate for 2008-09 was lowered by 9 per cent to 340 lakh bales (lb) against 369 lb recorded last year.
Demand was expected to fall sharper by 16 per cent to 280 lb in the year under review against 326 lb registered last year. Reeling under the economic slowdown, mill consumption may fall 4 per cent to 195 lakh bales (203 lakh bales), while that of small scale units was likely to drop 15 per cent to 20 lakh bales (23 lakh bales), according to CAB estimates.
Mr A.B. Joshi, Textile Commissioner, Maharashtra, said apart from unfavourable climatic condition and marginal fall in acreage, the production was affected by red leaf syndrome in some of the States.
Acreage down
Area under cotton cultivation fell marginally to 93.73 lakh hectares (lh) (94.39 lh) as the northern zone registered a drop of 34 per cent to 12.15 lh (14.26 lh). Punjab recorded 11 per cent dip in acreage at 5.37 lh (6.04 lh), Haryana 5.80 per cent to 4.55 lh (4.83 lh) and Rajasthan 34 pr cent at 2.23 lh (3.39 lh).
Cotton coverage in the central zone (Gujarat, Maharashtra and Madhya Pradesh) was down marginally by 0.66 per cent at 62.05 lh (62.46 lh), while in the southern zone including Andhra Pradesh, Karnataka and Tamil Nadu it was up 12 per cent at 18.55 lh (16.59 lh).
AREA UNDER BT
Area under Bt cotton has increased substantially in all the nine States and occupies 69 lh which accounts for 73 per cent of total area covered.
Production in all the States fell sharply except for the southern zone which registered an increase of 13.56 per cent to 67 lb (59 lb). Led by the 20.45 per cent dip in production in Punjab to 17.50 lb (22 lb), the northern zone witnessed a fall of 17 per cent to 39 lb (47 lb). Haryana production was down 12.50 per cent at 14 lb (16 lb) and Rajasthan it dropped 16.67 per cent to 7.50 lb (9 lb).
In Gujarat and Maharashtra the production was down 19.65 per cent and 14.29 per cent to 90 lb (112 lb) and 18 lb (21 lb), while it was static in Maharashtra at 62 lb.
The southern zone recorded a rise of 13.56 per cent in production at 67 lb (59 lb).Yield low
Yield per hectare in Punjab was down 10.53 per cent to 554 kg/hectare (kph) (619 kph), Gujarat 19.48 per cent at 633 kph (786 kph) and Madhya Pradesh 17.56 per cent to 467 kph (567 kph). Yield in Karnataka was higher by 16 per cent at 392 kph (338 kph). Overall the yield was down 7.29 per cent at 526 kph (567 kph).
Cotton Corporation of India has procured about 71 lakh bales as on January-end, while it has sold 12 lakh bales, said Mr S.C. Grover, Chairman and Managing Director, Cotton Corporation of India.
Exports estimate
CAB has lowered the exports estimate by 70 per cent to 50 lb against 85 lb recorded last year. The textile commissioner office has registered request for export of 11 lb while only 7 lb was shipped. Expressing confidence that the export target of 50 lb will be achieved, Mr Joshi said the country is getting good orders from China, Bangladesh and Pakistan. (Source: The Hindu BusinessLine)
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