cotton

The government is considering increasing the minimum support price for medium and long staple cotton by 160 rupees per 100 kg for the new crop year beginning July. The agriculture ministry has proposed increasing the MSP of medium staple variety to 4,020 rupees per 100 kg and long staple to 4,320 rupees. The agriculture ministry has moved a Cabinet note on MSP for cotton, based on the recommendation of the Commission for Agricultural Costs and Prices. In the current season, MSP for medium staple cotton is at 3,860 rupees per 100 kg and long staple is 4,160 rupees.

Futures contracts of cottonseed oilcake were down over 1% on the NCDEX because of a rise in quantity of stocks which expire in the May contract. The most active June contract of cottonseed oilcake on the NCDEX was down 1.3%. About 10,535 tonne of cottonseed oilcake expire in the May contract and available in the spot market. Sufficient availability of the oilcake in the local market, along with expectations of an early onset of the monsoon in Kerala and subsequently, to the interior parts of the country, is seen weighing on prices of cottonseed oilcake.

July cotton futures on the ICE fell because traders booked profits after the contract hit a three-year-high of 87.18 cents a pound on previous close. The most-active July contract of cotton on the ICE was at 84.54 cents a pound, down 0.9% from previous close. Prices of cotton on the ICE rose because of higher demand for the crop from the US, a heavy build-up in net long positions in cotton contracts.

Cotton production in Burkina Faso, a West African country, is likely to rise 17% on year to 800,000 tonne in 2017-18, as the country started using conventional seeds again. The higher instances of pink bollworm pest attacks in some regions in India despite the use of the BT cotton seed variety has raised questions over the use of the genetically modified seed. BT cotton seed is used widely in India to guard against pink bollworm pest attacks.

The National Commodity and Derivatives Exchange on Friday marked 5,150 tonne cottonseed oilcake, and 1,700 tonne mustard seed for staggered delivery in the May contract. The May derivative series will expire on May 19, Under the staggered delivery mechanism, sellers can indicate intention of delivery to the exchange during the tender period, which is 10 days before the contract expires.

Futures contracts of cotton rose nearly 1% on the MCX because of higher demand in the spot markets, and tracking benchmark contracts on the ICE. May contract of cotton on the MCX traded up 0.8% from the previous close. The June contract also traded 0.7% higher at 21,390 rupees. On the ICE, the most-active July contract traded at 77.53 cents per pound. However, prospects of a higher acreage for cotton, amid reports of an early onset of the southwest monsoon in India, prevented any further rise in prices.

Futures contracts of cottonseed oilcake on the NCDEX recovered due to increased buying after prices hit a 17-month low of 1,845 rupees per 100 kg on Thursday. The most-active June contract was up 1.8% from the previous close. Gains in cotton futures on the MCX also contributed to the rise. The May contract traded up 1.6%. Cottonseed oilcake, a derivative of cotton, is used as animal feed. In Akola, Maharashtra, the benchmark market, cottonseed oilcake was sold at 1,900 rupees per 100 kg, while in Kadi, Gujarat, the commodity was sold at 1,960 rupees, both unchanged from the previous day.

Arrivals of cotton at major spot markets across the country were at 52,000 bales (1bale=170kg) on Thursday, unchanged from previous level.

Futures contracts of cotton traded up 2% on the MCX, tracking a sharp rise in the benchmark contract on ICE. May contract of cotton on MCX traded up 2.2% from the previous close. On ICE, the most-active July contract hit a three-year high of 82.18 cents per pound. Cotton prices on ICE rose sharply because of short covering. Prices rose as ending stocks of cotton are expected to fall globally in 2017-18. The US Department of Agriculture has pegged the world 2017-18 (Aug-Jul) cotton ending stocks at 87.14 million bales (1USbale=480 pound), lower from 89.52 million bales in 2016-17.

China has so far managed to sell 869,712 tonne of the 1.18 million tonne of cotton from its state reserves during Mar-Apr. During Mar 6-31, the country sold 465,722 tonne out of 615,082 tonne it offered to textile mills, while during Apr 1-28, 403,990 tonne of the 568,254 tonne were sold. The total auctioned cotton was mainly from its domestic stocks, In April, the average price realisation of the cotton auctioned ranged from 14,639 yuan a tonne to 15,312 yuan. The country is de-stocking its massive state cotton reserves built over the past three years. China cotton auction has the potential to influence global cotton prices. International Cotton Advisory Committee has projected China stocks ending for the current season at 9.3 million tonne, accounting for 53% of world stocks. In 2016, the country had sold around 2.6 million tonne cotton from its reserves and expects a similar volume to be sold this year. It sells cotton stocks until Aug 31.

The US Department of Agriculture has pegged India 2017-18 (Aug-Jul) cotton output at 28.0 million bales (1USbale=480pound), up 6% on year. Following projections of higher output, the department cut its estimate for India cotton imports by 30% to 1.75 million bales for 2017-18. India cotton exports for the next season are seen rising to 4.5 million bales, from an estimated 4.2 million bales this year. Global cotton production in 2017-18 is seen at 113.22 million bales, up from 105.88 million bales estimated for this year. Global production is expected to rise nearly 7%, despite marginally lower average yields, as area rebounds to its highest level in three years Global ending stocks of cotton in 2017-18 are estimated at 87.14 million bales, lower from 89.52 million bales in 2016-17.

Futures contracts of cottonseed oilcake on NCDEX hit a 17-month-low because of expectations of early onset of the southwest monsoon this year. Most-active June contract was down 1.2% from previous close. The southwest monsoon is likely to hit Andaman sea and the Nicobar Islands by Monday, five days ahead of the normal date of May 20. Lower demand from stockists and reports of higher inventories are seen weighing on prices of the commodity, In Akola, a key delivery centre in Maharashtra, cottonseed oilcake was sold down 20-30 rupees from the previous day.

Arrivals of cotton at major spot markets across the country were at 52,000 bales (1bale=170kg) on Wednesday, down from 52,500 bales on previous close.

Futures contracts of cotton on the MCX traded lower in anticipation of higher output in 2017-18 (Oct-Sep). India 2017-18 cotton acreage is seen rising as better returns for the cash crop in the current season could encourage farmers to cultivate the fibre crop in more area. Subdued demand because of inferior quality arrivals in the domestic market and weakness in cotton futures on the ICE further contributed to the fall. On the MCX, the May contract traded per bale (1bale=170kg), down 0.10% from the previous close, while on the ICE. Most active July contract traded at 77.38 cents per pound, down 0.06%. Cotton prices also declined ahead of the USDA monthly demand-supply report.

All-India cotton arrivals down at 52,500 bales Tue. Cotton arrivals at major spot markets across the country were at 52,500 bales (1 bale = 170 kg) on Tuesday, down from 57,900 bales previous close.

Cotton arrivals at major spot markets across the country were at 52,900 bales (1 bale = 170 kg) on Monday, down from 57,500 bales on Friday,

India cotton imports have surged as global purchases seemed more lucrative, and as the strength in the rupee against the dollar encouraged mills, particularly those in south India, to aggressively import the commodity. Imports from African countries work out cheaper for mills in south India, as opposed to purchases from traders in Gujarat, Rajasthan and Maharashtra at a premium, and the added transportation cost. There was a twist in the tale in April when changing market dynamics due to a rise in global and a fall in domestic prices brought imports to a sudden halt, leaving estimates haywire. So far, 2.6-2.7 million bales have been contracted for the current season. We expect deals for another 0.3-0.4 million bales coming in the current season. Imports revive (from current lull) because of the quality issues that the mills have been facing this year. From high moisture level to contamination and adulteration, Indian cotton faces several quality issues, forcing premium textile companies to depend on imports.

Futures contracts of cotton on the MCX were lower due to expectations of higher crop in 2017-18 (Oct-Sep). Prospects of higher sowing across states and forecast of a normal monsoon dampened the market sentiment. Subdued demand for the commodity in the spot market because of inferior quality of arrivals also weighed on prices. Weakness in cotton futures on ICE contributed to the fall. On the MCX, the May contract of cotton traded down 0.5% from the previous close. The most active July contract traded at 77.44 cents per pound, down 0.4%.

Cotton arrivals at major spot markets across the country were at 57,500 bales (1bale=170kg) down marginally from 57,600 bales.

Arrivals of cotton in northern India increased 31% on year during Oct-Apr to 4.42 million bales (1bale=170kg), cotton output in the northern zone, which includes Punjab, Haryana and Rajasthan, to rise to 4.48 million bales from 3.75 mln bales the previous year. Cotton output had fallen last year as over 50% of crop in Punjab was destroyed by severe white fly attack. Mill consumption demand during Oct-Apr was pegged at 4.42 million bales, compared with 3.33 million bales last year.