Cotton

[rakeshmalik]

New York cotton futures slip
NEW YORK (July 15 2008): Cotton futures was hit by a fusillade of investment fund sales to finish lower on Monday and brokers said the weak tone may lead to further losses in the days ahead. The key December cotton contract slid 1.56 cents to finish at 72.03 cents per lb, dealing from 71.89 and 73.39 cents.

Volume traded in the December contract stood at 6,597 lots at 2:41 pm EDT (1841 GMT). "We're getting direction from other (weak) markets and not finding direction internally," said Frank Weathersby, an analyst for brokers Affinity Trading in Fort Walton Beach, Florida.

Cotton lost ground from the start and analysts said the close below the Tuesday low of 72.16 cents, basis December, does not augur well for the market. "It's discouraging. We think that holding on last Friday may allow us to rebuild, but you have a day like this when the outside markets suffer again and down we go," a dealer said.

Traders said the market will turn its attention to the US Agriculture Department's weekly crop progress report being released after the markets close on Monday. The weekly Nunn Cotton letter said: "The August 2007 low for the December 2008 contract is 66.40 (cents), and if December were to break the 70.60-70.85 area, that could be a target.

" It added that "cotton prices are not attractive to producers and inflationary pressures have yet to influence cotton like other commodities. Low cotton prices mean cotton is not profitable and won't be planted not only in the US, but other parts of the world (like Brazil, Australia, India, Africa)."

Brokers Flanagan Trading Corp sees support in the December contract at 71.65 and 70.50 cents, with resistance at 72.50 and 73.60 cents.Volume traded Friday hit 14,547 lots, exchange data showed. Open interest rose 402 lots to 221,859 lots as of July 11, exchange data showed.

 

[rakeshmalik]

India's 2007-08 cotton exports to rise 73pc to 1 crore bales
15 Jul 2008 1:27 pm

Mumbai - India's cotton exports during the current marketing year ending September may rise 73 per cent to one crore bales, as traders boosted shipments to benefit from a rise in global prices.

India's exports may increase 18 per cent compared with an earlier government estimate of 85 lakh bales made in May, J N Singh, Union Textile Commissioner and chairman of the State-run Cotton Advisory Board, said Tuesday. The country last year exported 58 lakh bales.

"We are likely to revise upwards the export projections in our next meeting in September and the figure could be around industry estimates of one crore bales," Singh said.

High exports this year have led to a decline in supplies in local markets, boosting cotton prices by 43 per cent from a year ago. High prices and low stocks has prompted the country's textile industry to ask the federal government to ban exports and scrap import duty on cotton.

Last week, the government scrapped import duty on raw cotton from 14 per cent earlier, to increase supplies.

However, Singh denied any move to impose a blanket ban on cotton exports.

"We are currently exploring various options such as quantitative restrictions on exports. But certainly there wouldn't be any blanket ban on exports," said Singh.

India's cotton production for the coming crop year that started in October is expected to rise 3 per cent to 3.25 crore bales, according to government projections.

However, as of July 11, cotton has been sown on 39.2 lakh hectares, down 38 per cent from 63.4 lakh hectares a year ago, as many farmers diverted acreage to other lucrative crops such as rice, and low rainfall in major growing areas.

But, Singh is still optimistic on the crop output as "productivity is likely to be higher this year due to increased area under genetically modified Bt cotton."

In India, cotton is sown in June and July, and the harvest begins around October.

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Cotton lint almost firm in west India
15 Jul 2008 4:57 pm

Mumbai - Cotton lint was quoted almost stable at the spot market across western India Tuesday. Buyers have adopted the 'wait-and-watch' policy.

At Kadi market in Gujarat, cotton lint S-6 A-grade was quoted at Rs 27,100-Rs 27,200/candy while average-grade traded at Rs 26,700-Rs 26,900/candy.

At Sendhwa market in Madhya Pradesh, the 28-mm cotton lint traded at Rs 27,500-Rs 27,800/candy; 29/30-mm cotton lint traded at Rs 28,000-Rs 28,500/candy; and 31 mm cotton lint at Rs 28,700-Rs 29,500/candy.

In Maharashtra, the 28-mm cotton lint traded at Rs 27,000-Rs 27,500/candy; 29-mm cotton lint traded at Rs 27,500-Rs 28,000/candy.


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Cotton lint trades down in north India
15 Jul 2008 4:19 pm

Abohar - Cotton lint went down further amid lack of demand at the current level of prices at all major markets across north India Tuesday.

India's cotton exports during the current marketing year ending September may rise 73 per cent to 10 million bales, as traders boosted shipments to benefit from a rise in global prices. India's exports may increase 18 per cent compared with an earlier government estimate of 85 lakh bales made in May, J N Singh, Union Textile Commissioner and chairman of the State-run Cotton Advisory Board, said Tuesday. The country last year exported 58 lakh bales.

Across Punjab, cotton lint traded at Rs 2,740-Rs 2,745/maund at Budhaldha and Taapa; Rs 2,725-Rs 2,730/maund at Malot and Bathinda; Rs 2,715-Rs 2,720/maund at Abohar; and Rs 2,700/maund at Manasa.

Cotton lint traded at Rs 2,700-Rs 2,750/maund in Haryana and at Rs 2,600-Rs 2,685/maund in Rajasthan.

 

[rakeshmalik]

ICE cotton jumps on cash market
16 Jul 2008 10:07 am

New York - ICE Futures US cotton settled sharply higher Tuesday as the market shrugged off commodities losses and rallied on cash business amid support from options-related buying.

Most-active December futures settled 168 points higher at 73.71 cents a pound and the nearby October contract settled up 174 points at 70.88.

Futures opened modestly lower and traded choppily to the upside before giving back gains by midsession as outside weakness pressured prices, analysts said. December cotton scraped the session low of 71.58 cents a pound and trade buying kicked in to propel prices amid bullish options activity, said Mike Stevens, futures analyst at SFS Futures in Mandeville, La. The market rallied to session highs, triggering buy stops at the 73.39 level. Futures settled off session highs.

Significant cash cotton activity sparked trade buying as the imbalance between the previously incongruent prices corrected, said Peter Egli, director of risk management at Plexus Cotton Ltd.

"Cotton has more of a mind of its own now," Egli said. Cotton often latches on to other commodities, often Chicago Board of Trade grains, when it lacks internal momentum.

Futures could complete a double-bottom technical formation, possibly attracting speculative buying, Egli said. A double bottom indicates the market has found a support level it is unlikely to breech.

ICE daily cotton stocks increased by 5,088 480-pound bales Monday to total 1.706 million bales with 20,361 awaiting review. ICE cotton open interested decreased by 611 positions Monday to total 221,248, according to the exchange.

Volume was estimated 13,375 lots. In options, approximately 6,035 calls and 4,955 puts traded, according to exchange data.

Close Change Range
Oct 70.88 +174 68.75-71.50
Dec 73.71 +168 71.58-74.18
Mar 79.14 +166 77.00-79.50

 

[rakeshmalik]

Cotton lint recovers in north India
16 Jul 2008 4:04 pm

Abohar - Cotton lint prices moved upwards slightly at major markets across north India Wednesday, as market sentiments have improved tracking bullish trend in the international markets today and the government's recent statement that it was not intending to ban cotton exports from the country.

Union Textile Commissioner and chairman of the State-run Cotton Advisory Board J N Singh Tuesday denied any move to impose a blanket ban on cotton exports. "We are currently exploring various options such as quantitative restrictions on exports. But certainly there wouldn't be any blanket ban on exports," said Singh.

Across Punjab, cotton lint traded at Rs 2,760-Rs 2,765/maund at Budhaldha and Taapa; Rs 2,750-Rs 2,755/maund at Malot and Bathinda; Rs 2,740-Rs 2,745/maund at Abohar; and Rs 2,730-Rs 2,735/maund at Manasa.

Cotton lint traded at Rs 2,720-Rs 2,750/maund in Haryana and at Rs 2,600-Rs 2,680/maund in Rajasthan.

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Mumbai - Cotton lint was quoted almost steady at the spot market across western India Wednesday. Buyers are staying away from the market looking at the current higher prices.

At Kadi market in Gujarat, cotton lint S-6 A-grade was quoted at Rs 27,000-Rs 27,300/candy while average-grade traded at Rs 26,600-Rs 26,900/candy.

In Maharashtra, the 28-mm cotton lint traded at Rs 26,900-Rs 27,300/candy; 29-mm cotton lint traded at Rs 27,400-Rs 27,800/candy, 30-mm cotton lint traded at Rs 27,900-Rs 28,100/candy.

 

[rakeshmalik]

Cotton target may be slashed by 10 percent

KARACHI (July 17 2008): The federal government is likely to slash the cotton production target by 10 percent for the current fiscal year following a decline in the cotton yield across the country, sources said. They said during the current year sowing of cotton declined by 8-10 percent mainly due to rising cost of inputs, sub-standard seeds, heavy pest attacks and water shortage.

Sources said a high-level meeting was held at Lahore last week to review cotton sowing and production, and the outcome of the meeting was that cotton sowing this year will be less then the last fiscal year chiefly because of water shortage in different parts of the country.

For the current fiscal year, the government fixed a sowing target of 3.2 million hectare across the country, 0.2 million higher than the last fiscal year. "However, as per provinces' data, presented in the meeting, overall cotton sowing across the country stood at 2.95 million hectares by the end of June 2008 against the target of 3.2 million hectares, about 0.25 million hectares less then the target of FY09," sources said.

Provincial statistics depict that sowing this year is also less than the last fiscal year's sowing of 3.18 million hectare, as the growers are switching to other crops such as sunflower due to expected attack of mealy bug on cotton crop.

Therefore, following a decline in the cotton sowing, it is likely that crop estimation committee in next meeting would cut the cotton production estimates by 10 percent to 12.6 million bales for FY09 against the target of 14.12 million cotton bales set earlier. The meeting also directed the provincial agriculture departments to provide final sowing statistics by the end of July 2008 for crop estimation. Sources said that it is expected that first estimation would be announced by the end of August or September, in which the government will likely to cut crop production estimates


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Ginners threaten countrywide strike
RECORDER REPORT
MULTAN (July 17 2008): The Pakistan Cotton Ginners Association (PCGA) has announced that it will go on a country wide strike from August 1, if their demands were not fulfilled. More than 1,200 cotton ginning factories would be shut down for the cotton season 2008-09. The association has started its inter-provincial connections for the country wide strike.

Some of the major problems being faced by the ginners includes, Rs 5 per bale cotton standardisation fee, no renewal the working license, non issuance of NOC by the provincial government, 10 percent withholding tax on electricity bills, increasing the ratio on withdrawn of money from the banks from 2 to 3 percent, etc. The largest industrial association of the country having more than 1,200 members is in big trouble nowadays and the bureaucracy is creating a lot of problems for them.

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Business activity further up on cotton market
RECORDER REPORT
KARACHI (July 17 2008): Trading activity stepped up on the cotton market on Wednesday as mills and spinners showed renewed interest in the fresh buying, dealers said. The Karachi Cotton Association (KCA) official spot rate was unchanged at Rs 3650, dealers said.

Phutti prices in Punjab were at Rs 1800-1850 while in Sindh were unchanged at Rs 1825-1850, they said. Commenting on the developments some analysts said that increased arrival of phutti propelled the mills and spinners to make fresh purchasing.

They said that prices moved upward as ginners were not ready to lower the prices in anticipation of some time gap in picking operation of phutti. But the trading activity may slow down in the coming days as a result of low pace of phutti arrival. The prices will stabilise in the near-term, they said.

On Tuesday, the NY cotton futures settled sharply higher on investment fund short covering as the key December cotton contract rose 1.68 cents to finish at 73.71 cents per lb, dealing from 71.58 to 74.18 cents. Volume traded in the December contract stood at 13,319 lots at 2:53 pm EDT (1853 GMT).

The following deals were reported : some 200 bales of cotton from Hyderabad sold at Rs 3875, 200 bales from Shahdadpur at Rs 3875, 200 bales from Tandoadam at Rs 3875, 200 bales from Sanghar at Rs 3875, 1400 bales from Burewala at Rs 3850, 400 bales from Chichawatni at Rs 3800, 600 bales from Mian Channu at Rs 3800-3825, 1200 bales from Arifwala at Rs 3800-3825, 400 bales from Gojra at Rs 3800-3825, 200 bales from Muridwala at Rs 3825, 200 bales from Vehari at Rs 3800, 600 bales from Sahiwal at Rs 3825, 200 bales from Haroonabad at Rs 3825, 200 bales from Hasilpur at Rs 3825, 400 bales from Mongi-Banglow at Rs 3850, 200 bales from Gajjgo at Rs 3850, 500 bales from Pakpattan at Rs 3800 and 1000 bales from Arifwala at Rs 3800, dealers said.

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The KCA Official Spot Rate for Local Dealings in Pak Rupees
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FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
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Rate Ex-Gin Upcountry Spot Rate Ex-Karachi
for Price Sales Tax @ 15%
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37.32 Kgs 3,650.00 50 3,700.00
Equivalent-------------------------------------------------
40 Kgs 3,912.00 50 3,962.00
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[rakeshmalik]

New York cotton finishes firmer
NEW YORK (July 17 2008): Cotton futures settled higher Wednesday on investor buying as the market appears poised to grind up on follow-through purchases this week, brokers said. The key December cotton contract rose 0.12 cent to finish at 73.83 cents per lb, dealing from 72.56 to 74.20 cents.

Volume traded in the December contract stood at 9,320 lots at 2:39 pm EDT (1839 GMT). "The market wants to try a little bit higher now," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.

He said the market has managed to build on its gains from the previous session and apparently enjoys steady commercial support around the 72 cents area, basis December. Analysts said the fundamental outlook for cotton over the longer-term will depend on how low the US cotton crop in 2008/09 will be and what kind of world cotton demand is seen despite threats to global economic growth.

For now, the trade will look at the weekly export sales figures from the US Agriculture Department. Cotton brokers said they expect total US cotton sales to range from 250,000 to 375,000 running bales (RBs, 500-lbs each), against sales last week of 119,600 RBs. The brokers said they feel US cotton export shipments of previously booked orders to reach 300,000 to 330,000 RBs, versus shipments in last week's report of 293,800 RBs.

Brokers Flanagan Trading Corp sees support in the December contract at 73.60 and 72.50 cents, with resistance at 74.40 and 75.25 cents. Volume Tuesday hit 16,521 lots, exchange data showed. Open interest rose 1,017 lots to 222,265 lots as of July 15, exchange data showed.
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Yarn Prices on the International Market (Statistical Report)

15 July 2008 - Spun yarn prices further rose on the international market in the last weeks, although less significantly than fiber prices. Cotton spinners are confronted with strong difficulties in India. Effective transaction prices are not in line with surging costs, as reflected by our exclusive series of price tables. Blended yarn prices clearly rose, being boosted by a rebound in polyester prices. Viscose yarn prices less significantly decreased

 

[rakeshmalik]

Import duty cut may not bring down cotton prices`

New Delhi, July 17: Cotton prices, which have surged significantly in the domestic market, are unlikely to ease even after the government scrapped import duty and withdrew export incentives, a latest report said.

"Scrapping of import duty on cotton may not bring down prices as a large portion of the domestic consumption is in the short to medium staple variety in which India is self-sufficient, cost competitive and has an exportable surplus," leading rating agency Crisil said.

Currently imports are restricted to extra long staple (ELS) variety of cotton, which account for a mere five percent of consumption, it said.

Despite bumper crop, cotton prices in the domestic market have surged by around 25 per cent in 2007-08 in line with global prices.

According to official data, the country's cotton production rose to 25.81 million bales in 2007-08 from 22.63 million bales in the last year.

In order to boost domestic supply and arrest price rise, the government on July 9 removed 14 per cent of import duty and withdrew one per cent of export incentive for raw cotton.

The report highlighted that the lowering of import duty would, however, lead to the softening of prices of the ELS variety, which India imports primarily from African countries and the US. This would benefit spinners producing finer count of yarn.

Further, raw cotton exports are expected to increase despite the withdrawal of export incentives as global cotton output is expected to decline in 2008-09, and there is possibility of a global shortage, it added.

 

[rakeshmalik]

Cotton lint improves in west India
17 Jul 2008 4:46 pm

Mumbai - Cotton lint prices were quoted up RS 100/candy at the spot market across western India Thursday. The increasing demand amid limited stocks at the market are supporting the prices. Market sentiments have improved tracking bullish trend in the international markets and weak monsoon in cotton-producing states in the country.

At Kadi market in Gujarat, cotton lint S-6 A-grade was quoted at Rs 27,200-Rs 27,500/candy while average-grade traded at Rs 26,800-Rs 27,100/candy.

In Maharashtra, the 28-mm cotton lint traded at Rs 27,000-Rs 27,300/candy; 29-mm cotton lint traded at Rs 27,500-Rs 27,800/candy, 30-mm cotton lint traded at Rs 27,900-Rs 28,100/candy.

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Cotton lint trades up in north India
17 Jul 2008 4:43 pm

Abohar - Cotton lint returned to the bullish trend at major markets across north India Thursday. The increasing demand amid limited stocks at the market are supporting the prices. Market sentiments have improved tracking bullish trend in the international markets and weak monsoon in cotton-producing states in the country.

Across Punjab, cotton lint traded at Rs 2,790-Rs 2,795/maund at Budhaldha and Taapa; Rs 2,770-Rs 2,775/maund at Malot and Bathinda; Rs 2,745-Rs 2,750/maund at Abohar; and Rs 2,735-Rs 2,750/maund at Manasa.

Cotton lint traded at Rs 2,730-Rs 2,750/maund in Haryana and at Rs 2,610-Rs 2,680/maund in Rajasthan.

 

[rakeshmalik]

Cotton prices rising again
DR ZAFAR HASSAN
LAHORE (July 18 2008): After sagging earlier during this week, both seedcotton (kapas/phuti) and lint prices have moved up handsomely over the past couple of days. Recent rains in parts of the cotton belt and weakening of the Pakistani rupee against the united states dollar are being cited as reasons behind the sharp upturn in cotton.

Thus seedcotton prices have gone up by Rs 100 to Rs 150 per 40 kgs over the past couple of days, while lint prices are also reported to have gone up by Rs 150 to Rs 200 per maund during the same period of time. Likewise, the prices of cottonseed (kakra/binola) have gone up from Rs 675/Rs 670 to rs.750 per maund (37.32 kgs) in Sindh and in Punjab they are said to have gone up from Rs 650 to Rs 725 per maund.

Generally speaking, lint prices were ruling from Rs 3950 to Rs 4300 per maund (37.32 kgs) in both Sindh and Punjab on Thursday. In actual sales reported till, the afternoon, 200 bales of new crop (2008-2009) from Sanghar in Sindh reportedly sold at Rs 3950 per maund while 200 bales from Tando Adam sold at Rs 4000 per maund.

In the Punjab, 400 bales of cotton each from Mian Channu and Gojra both reportedly sold at Rs 3950 per maund, 200 bales from Chichawatni sold at Rs 3975 per maund, 200 bales each from Mian Channu and Gagoo sold at Rs 3985 per maund, while 200 bales from Pir Mahal were said to have been sold at Rs 4000 per maund.

By now nearly five ginning factories in Sindh and about 65 factories in Punjab are said to be pressing the new crop (2008-2009). There is hardly any leftover stock of any cotton from the outgoing crop (2007-2008) with the ginners. Anyhow, the Karachi Cotton Association (KCA) has found it fit to increase the ex-gin prices of grade three cotton from the current crop (2007-2008) by Rs 25 per maund on Thursday and fixed it at Rs 3675 per maund.

After recouping earlier during the past few days, the Pakistan rupee has again fallen against the United States dollar measurably as weakness of the rupee was seen clearly on Thursday. Brokers in the market said the rupee reached Rs 72.83 in the formal market against the greenback, while it kneeled further in the free market to about Rs 73.50. This weakening of the Pakistan currency unit has emboldened some of the exporters who have reportedly extended their operations in the market.

Moreover, many if not most of the domestic spinners are short of cotton and it may take a while before more cotton trickles in from the new crop (2008-2009) in Pakistan. In the mean time, the textile industrialists have called off the proposed countrywide strike against the very high gas prices which the government had fixed for the dedicated power units of the textile mills on the assurance of the government that the gas prices would be reduced suitably. Government may take such a step on Friday when new trade policy is expected to be announced.

While a reported sale of about 10,000 bales of new crop (2008-2009) cotton took place on last Wednesday, only about 3,000 bales were sold on Thursday due to increase in cotton prices. Anyhow, it is estimated that about 100,000 bales of new crop cotton have already been ginned upto now. In the evening, ginners were said to have turned reluctant sellers of cotton expecting higher rates.

Brokers added in the evening that decrease in arrivals of seedcotton following recent rains have been instrumental in turning both seedcotton and lint prices very tight. Anyhow, most traders are still quoting new crop (2008-2009) output in Pakistan to be about 12.6 million domestic size bales following reports of decrease of planting by about 10 percent against the government target of 14.1 million bales.

In ex-gin terms, this translates into a total output of about 12 million bales in case there is no pest or weather damage to the crop later in the season. According to one recent report emanating from Multan, the cotton producing hub of Punjab, the Pakistan Cotton Ginners Association (PCGA) is going on a countrywide strike from the 1st of August 2008 closing down nearly 1200 ginning units if their demands are not met.

The major reasons reported for the intended strike are said to include non-renewal of their working licences, lack of NOC issuance by the provincial government, application of 10 percent withholding tax on electricity bills, tightening of credit facilities by the banks and imposition of standardisation fee of rupees five per bale on the factories.

Reports added that ginning factories are facing big trouble due to these various problems and expect the government to remedy them by providing necessary relief. Another report from Islamabad stated that mineral oil will be imported from Egypt to tackle the growing menace of the mealy bug to the cotton crop in Pakistan.

 

[rakeshmalik]

Higher rates keep buyers away from cotton market

KARACHI (July 18 2008): Higher prices kept the mills and spinners away from the cotton market on Thursday, dealers said. The Karachi Cotton Association (KCA) official spot rate rose by Rs 25 to Rs 3675, they said. Phutti prices in Punjab were at Rs 1900-2100 while rates in Sindh rates were unchanged at Rs 2000, they said.

As a result of higher demand by the mills and spinners for the last several sessions, a deal of 400 bales from Mir Mahal done between Rs 3950-4300, dealers said. Hectic buying pushed the prices up and it is likely that the prices may maintain the present levels due to strong demand, they added.

The mills and exporters are on the sidelines on the perception that this move may bring the prices down in the near future. But, the ginners may not lower the rates following the shortage of cotton production the world over, they said. In the meantime, one factor is there that if the New York cotton market showed weakness in the coming days, the prices may depict easier trend, they observed.

On Wednesday, the NY cotton futures settled higher on investor buying as the market appears poised to grind up on follow-through purchases this week, brokers said. The key December cotton contract rose 0.12 cent to finish at 73.83 cents per lb, dealing from 72.56 to 74.20 cents. Volume traded in the December contract stood at 9,320 lots at 2:39 pm EDT (1839 GMT).

THE FOLLOWING DEALS WERE REPORTED: 100 bales of cotton from Mirpur Batro sold at Rs 3900, 200 bales from Shahdadpur at Rs 3875, same figure from Shanghar at the same rate, same number from Pir Mahal at Rs 3925, same number from Burewala at Rs 3900, same figure from Gojra at the same rate, same figure from Pakpattan and same number from Arif wala at the same figure, dealers said.

===========================================================
The KCA Official Spot Rate for Local Dealings in Pak Rupees
-----------------------------------------------------------
FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
===========================================================
Rate Ex-Gin Upcountry Spot Rate Ex-Karachi
for Price Sales Tax @ 15%
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37.32 Kgs 3,675.00 50 3,725.00
Equivalent-------------------------------------------------
40 Kgs 3,938.00 50 3,988.00
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