Karnataka Cotton output is seen rising 41% on year to 1.4 million bales (1bale=170kg) as higher returns in 2016-17 may encourage farmers to expand the area under the cotton crop.
Arrivals of cotton across the country were down 2,000 bales at 67,700 bales (1bale=170kg) on Tuesday as lower supplies in Maharashtra dragged the total arrivals of the fibre crop down.
Consumption by cotton mills in the country is seen rising 2% in 2017-18 to 5.2 million tonne, due to competitive prices for cotton yarn products. Current season, mill demand has been pegged at 5.1 million tonne. Cotton consumption in China, the largest consumer of the fibre, is seen increasing by 1% to 7.7 million tonne in 2017-18. China accounts 30% of world cotton consumption. Consumption by cotton mills in Pakistan is expected to rise by 1% to 2.3 million tonne due to new incentives for textile exports offered by the government, while demand in Bangladesh is projected to increase by 5% to 1.5 million tonne in 2017-18. The committee has increased its forecast for 2017-18 global cotton output to 23.58 million tonne, from 23.12 million tonne projected in April, as higher returns encouraged farmers to expand the area under the cotton crop. Global cotton consumption is expected to rise to 24.55 million tonne, from 24.42 million tonne in the previous month. Year-ending stocks are expected at 16.41 million tonne, against forecast of 16.55 million tonne in April. July cotton futures contract on the Intercontinental Exchange is down 0.04% at 79.4 cents a pound, while the December contract was down 0.09% at 75 cents a pound.
Futures contracts of cotton rose on the MCX after arrivals declined in major spot markets across the country. arrivals of cotton in spot markets stood at 67,700 tonne, lower than 69,700 tonne on previous close. Consumption of cotton by mills is seen rising 2% in 2017-18 to 5.2 million tonne, due to competitive prices for cotton yarn products. This has also supported the sentiment. The most active May contract of cotton was at 20,650 rupees per bale (1bale=170kg), up 0.6% from the previous close.
The April contract of kapas fell on the NCDEX because of panic selling by stockists in anticipation of higher acreage under the crop this season. The most-active April contract of kapas on the NCDEX was down 0.8% from previous close. On the MCX, the May contract of cotton was at 20,660 rupees per bale (1bale=170kg), down 0.3%. The May contract of cottonseed oilcake, a derivative of kapas, was down 0.9% on the NCDEX. Acreage under cotton is estimated to increase this year in Gujarat and Maharashtra due to lucrative prices. In Gujarat, the largest cotton producing state, the acreage under cotton is estimated to increase by at least 5% if the initial response to seed purchase is any indication.
The government of Pakistan is set to distribute 38,000 tonne of certified and approved cotton seeds to the farmers across the country to enhance output. This year cotton crop production target was at 14.40 million bales (1bale=170kg) as compared to the production targets of 14.1 million bales in 2016. To achieve maximum crop output, the government ensure supply of 100% certified cotton seeds to farmers, during the current kharif season. Pakistan is the India second largest cotton export destination.
All-India cotton arrivals unch at 73,300 bales.
Rabobank expects cotton futures on the Intercontinental Exchange to decline in the long term due to expectations of a rise in the area under the crop globally in 2017-18. the July cotton contract on ICE is trading at 79.17 cents a pound, down 0.3 cents. prices are anticipated to come under pressures as excellent global prices incentivise area expansion, global cotton acreage is expected to rise 4% in 2017-18 led by the US, China India, and Pakistan. The market expects 2017-18 US cotton acreage to be in the range of 11-12 million acres, while Rabobank sees it at 11.3 million acres.
Cotton arrivals at major spot markets across the country were unchanged at 73,300 bales (1bale=170kg).
Futures contracts of cotton on the MCX fell after rising in the previous session as traders booked profits, the most active May contract of cotton was at 21,000 rupees per bale (1bale=170kg), down 0.6% from the previous close. likely higher output in 2016-17 (Oct-Sep) has also kept sentiment bearish, Cotton output in Punjab, among the largest producers in the country, is likely to rise a whopping 220% on year to 1.26 million bales in 2016-17, while in Haryana, output is seen up 106% on year at 2.04 million bales, according to the third advance estimates from the farm departments of the two states. IMD has forecast the Jun-Sep southwest monsoon to be normal at 96% of the long-period average, adding to the expectations of higher production of cotton and weighing on sentiment.
Cotton farming in the country is seen gaining ground next season as favorable prices this year have again stirred the interest of farmers in the fiber crop. The acreage under cotton is likely to increase 10% to more than 11 million ha in the season starting Oct 1, but corresponding production estimates depend largely on how the monsoon pans out. In the current season, 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. Record high prices of many pulses in the previous year had also prompted the shift away from cotton. Cotton output rose marginally to 34.05 million bales (1bale=170kg) from 33.8 million bales due to a sharp rise in yields across states owing to conducive weather conditions.
Cotton arrivals at major spot markets across the country were pegged at 73,300 bales (1 bale = 170 kg) on Monday, marginally down from 73,800 bales on previous close.
Futures contracts of cotton on MCX fell for the third consecutive trading session, tracking weakness in spot prices. The most-active May contract of cotton was at 20,940 rupees per bale (1bale=170kg), down 0.7% from previous close. Subdued demand for cotton across spot markets kept prices under pressure. Cotton output in Punjab, among the largest producers in the country, is likely to rise a whopping 220% on year to 1.26 million bales in 2016-17 (Jul-Jun), while in Haryana, output is seen up 106% on year at 2.04 million bales, according to third advance estimates of the state farm departments. For the rest of the day, cotton futures are likely to trade down due to selling pressure amid thin volumes.
Futures contracts of cottonseed oilcake on the NCDEX declined over 2% due to selling pressure as cotton output is likely to increase in 2017-18 (Oct-Sep). India Meteorological Department has projected normal southwest monsoon rainfall in 2017. Good rains boost cotton production. On the NCDEX, the most active May contract of cottonseed oilcake traded down 1.9% from the previous close. In Akola, the benchmark market for cottonseed oilcake in Maharashtra, the commodity was sold down 25 rupees from previous close. In Kadi, Gujarat, the prices were unchanged. Sufficient supply and sluggish demand due to availability of cheaper alternatives for cattle feed also weighed on cotton prices.
Futures contracts of cotton on the MCX fell for the second consecutive session because of rise in arrivals in physical markets and expectation of higher output in 2017-18 (Oct-Sep). The most-active May contract of cotton was (1bale=170 kg), down 0.8% from the previous close. The arrivals of cotton in major spot markets across the country were pegged at 73,800 bales on previous close, higher than 69,200 bales on Thursday. cotton output in India, the largest producer, is estimated to rise 2% to 5.9 million tonne in 2017-18. IMD has forecast the southwest monsoon this year (Jun-Sep) to be normal at 96% of the long-period average, adding to the hopes of higher production of cotton and thus weighing on the sentiments.
Arrivals of cotton in major spot markets across the country were pegged at 73,800 bales (1 bale=170 kg), up from 69,200 bales on previous close.
Cotton output in Haryana, among the largest producers of the cash crop, is estimated to surge 106% on year to 2.04 million bales (1bale=170kg) in 2016-17 (Jul-Jun) due to a better yield, according to the third advance estimate shared by an official from the state’s farm department. Cotton output in the state had fallen last year after the crop was attacked by white fly. The yield of cotton is seen rising to 609 kg per ha from 274 kg in 2015-16. Production of wheat in the northern state is seen falling 1.8% on year to 11.14 million tonne due to reduction in area under the crop.
Cotton futures on the Multi Commodity Exchange of India dethroned guar seed futures on the National Commodity and Derivatives Exchange to become the most traded agricultural contract on previous close, by clocking a turnover of 4.08 billion rupees. In international markets too, cotton futures have risen in the wake of falling inventories in China. The Intercontinental Exchange expanded the daily trading limit on cotton no. 2 futures contracts.
Arrivals of cotton in major spot markets across the country were pegged at 74,200 bales (1bale=170 kg) on previous close, down from 81,500 bales on previous close.
Futures contracts of cottonseed oilcake on the NCDEX fell because of weak demand in physical markets. The most active May contract of cottonseed oilcake on the NCDEX was down 0.5% from the previous close. In Akola, the benchmark market in Maharashtra, cottonseed oilcake and in Kadi, Gujarat, both down 20 rupees from previous close. Cheaper alternatives for cattle feed such as mustard feed and guar feed weakened the demand for cottonseed oilcake.