cotton

Cotton prices in 2017-18 are set to rise due to projection of a fall in global stocks despite higher production. Currently, the December futures contract of cotton on the InterContinental Exchange is at 73.38 cents per pound. For 2017-18, global cotton output is estimated to rise to 24.01 million tonne, against the estimate of 22.89 million tonne for last year. Consumption is expected to rise to 24.60 million tonne from 24.26 million tonne last year. Global year-ending stocks are expected at 16.41 million tonne, against 17.37 million tonne in the previous year. Cotton output in India, the largest producer, is estimated to rise 3% to 6.0 million tonne in 2017-18.

Pakistan year-to-Jul 2018 cotton output is seen down by 2 million bales (1bale=170kg) to 12.04 million bales due to water shortage and concerns over yield owing to late sowing. For 2017-18, Pakistan has set a cotton production target of around 14.4 million bales and is eyeing an area of 3.11 million ha under the crop. India may get an opportunity to export raw cotton in the coming season due to lower production in the neighboring country. India total cotton exports to Pakistan in 2016-17 (Oct-Sep) are estimated at 1.8-2.0 million bales.

Futures contracts of cotton rose on MCX tracking a rise in cotton futures on ICE, and because of lower arrivals in spot markets. On MCX, the June cotton contract was at 21,090 rupees per bale (1bale=170kg), up 0.4% from the previous close, while the most-active July contract on ICE was at 77.18 cents per pound, up 0.2%. Arrivals of cotton at major spot markets across the country were at 39,300 bales (1bale=170kg), down from 39,600 bales on previous close.

Futures contracts of cottonseed oilcake on NCDEX ended 2% lower as cheaper alternatives for cattle feed have hit demand for the commodity. The most active June contract of cottonseed oilcake on NCDEX was at 1,755 rupees per 100 kg, down 2% from previous close. Futures also declined due to weakness in spot prices. In Akola, cottonseed oilcake sold for 1,800 rupees per 100 kg, down 50 rupees from previous close.

Arrivals of cotton at major spot markets across the country were at 39,600 bales (1 bale = 170 kg), down from 40,100 bales on previous close.

Futures contracts of cottonseed oilcake on NCDEX declined for the third straight day and hit a fresh 17-month low of 1,768 rupees per 100 kg due to tepid demand. Cheaper alternatives for cattle feed has hit demand for cottonseed oilcake. Weakness in cotton contracts on MCX also weighed on prices of cottonseed oilcake. The most active June contract of cottonseed oilcake on NCDEX was at 1,777 rupees per 100 kg, down 1.4% from previous close. In Akola, cottonseed oilcake sold for 1,975 rupees per 100 kg, down 10-20 rupees from previous close.

Arrivals of cotton at major spot markets across the country were at 40,100 bales (1bale=170kg), down marginally from 40,500 bales previous close.

Futures contracts of cottonseed oilcake on the NCDEX extended their fall and hit a fresh 17-month low of 1,802 rupees per 100 kg due to sluggish demand. Cheaper alternatives for cattle feed weakened the demand for cottonseed oilcake. The most active June contract of cottonseed oilcake on the NCDEX traded at 1,813 rupees per 100 kg, down 0.48% from the previous close. In Akola, cottonseed oilcake was sold at 2,000 rupees per 100 kg, steady.

Futures contracts of cotton on the MCX traded higher, tracking a rise in benchmark cotton contract on the ICE, where lower estimates for global 2017-18 ending stocks pushed prices higher. The US Department of Agriculture has cut its estimate for global ending stocks of cotton for 2017-18 to 87.14 million bales (1USbale=480pound) from 89.52 million bales projected in 2016-17. On the MCX, the June contract was at 21,270 rupees per bale (1bale=170kg), up 0.3% from the previous close, while the most active July contract on the ICE was at 77.35 cents per pound, up 0.3%.

Of the total sown area under the fibre, the area under Bt cotton was 1.05 million hectare, while 74,600 ha was non-Bt. In Punjab, cotton acreage was at 344,000 hectare, up nearly 44% on year, while in Haryana, the area is up 16.6% at 583,000 hectare. In Rajasthan, however, cotton sowing was at 110,000 hectare, down from 116,000 hectare in the year-ago period. Farmers in most of central and southern India start sowing the crop after monsoon rains.

Futures contracts of cottonseed oilcake hit a 17-month low of 1,806 rupees per 100 kg tracking a fall in physical markets. Cheaper alternatives for cattle feed weakened the demand for cottonseed oilcake. June contract of cottonseed oilcake on the NCDEX ended at 1,824 rupees per 100 kg, down 1.88% from the previous close. In Kadi, cottonseed oilcake was sold at 1,165-1,170 rupees per 60 kg, down 50 rupees from previous close.

Arrivals of cotton at major spot markets across the country were at 40,500 bales (1bale=170kg), up marginally from 40,000 bales on previous close.

Pakistan has decided to re-introduce the 4% customs duty on imports of cotton for 2017-18 (Aug-Jul), a move that has raised an alarm for India as this may hit its exports. Though it is still premature to put a number to the quantum of fall in exports, traders estimate it at 0.5-1.0 million bales (1bale=170kg), or 25-50% of this year’s exports to Pakistan. India total cotton exports to Pakistan are estimated at 1.8-2.0 million bales in 2016-17 (Oct-Sep). Import duty (in Pakistan) may have negative impact on India’s exports to the tune of 1 million bales.

UK-based Cotton Outlook has raised its forecast for global cotton output in 2017-18 (Aug-Jul) to 24.49 million tonne from 24.40 million tonne projected in April. Higher returns and better yields have encouraged farmers to cultivate more area under the fibre. The agency retained its estimates for global cotton consumption during the year, at 24.45 million tonne. Consequently, global stock levels are now expected to rise by 44,000 tonne, compared with a forecast of a 47,000-tn decline in April.

All-India cotton arrivals up at 43,900 bales Wednesday. Arrivals of cotton at major spot markets across the country were at 43,900 bales (1bale=170kg) on Wednesday, up from 43,700 bales on previous clsoe.

Rabobank expects cotton futures on the Intercontinental Exchange to rise marginally in the short term because of strong demand from overseas markets. Exports are rising despite a decline in stocks in the US. The country exported around 13.7 million bales of cotton in 2016-17. USDA projects cotton exports in 2017-18 at 14 million bales. Weather remains relatively non-threatening for India and the US–key nations in driving higher exportable stocks in 2017-18. Cotton futures are expected to trade at around 77 cents per pound in the short term. July cotton contract on ICE is trading at 78.39 cents a pound, up 1.5% from the previous settlement. cotton prices are likely to decline to 68 cents a pound in the long term due to an increase in acreage as farmers earned higher returns from the crop last year.

All-India cotton arrivals down at 43,700 bales Tuesday. Arrivals of cotton at major spot markets across the country were at 43,700 bales (1bale=170kg) on Tuesday, down from 44,700 bales on previous close.

The area sown under kharif cotton so far in the country in 2017-18 was up 32.7% on year at 893,000 hectares. The normal area under the fibre in the corresponding period is 553,000 hectares. Cotton area in this kharif season is higher as farmers earned higher returns from the crop in the last year. In 2016-17 (Jul-Jun), the acreage under cotton had fallen 12% to 10.5 million ha on fears of pink bollworm infestation and whitefly attack, which had damaged a large quantity of the crop in 2015. Sowing of the cotton for the kharif season has commenced so far in Haryana with 463,000 ha area planted, Punjab with 280,000 ha, Rajasthan with 70,000 ha, and Karnataka with 50,000 ha.

All-India cotton arrivals down at 49,200 bales. Arrivals of cotton at major spot markets across the country were at 49,200 bales (1bale=170kg), down from 49,500 bales on previous close.

Arrivals of cotton at major spot markets across the country were at 50,500 bales (1bale=170kg) on Wednesday, unchanged from previous level.