Cotton

[rakeshmalik]

KCA lowers spot rate by Rs 125 in single day, phutti prices fall

KARACHI (August 21 2008): Dollar's slight recovery propelled the exporters to buy more phutti for better return, dealers said on the cotton market on Wednesday. The official spot rate after maintaining a stable trend, lost Rs 125 to Rs 4075 in a single day slide, they said. In the ready business phutti prices were down by Rs 50 to Rs 1825-1850 in Sindh and in the Punjab also rates were lower by Rs 50 to Rs 1700-1950, they said.

Nothing is clear in the political arena, causing uneasiness among the masses related to all walks of life. The leading politicians must come forward and try to settle the near and long-terms issues as early as possible, they added. In the meantime, there was the good opportunity for ginners to dispose off unsold stock because the fresh arrivals are likely within a few days, they said,

On Tuesday, the NY cotton futures closed softer on sales by small investors as an early rise in fiber contracts fizzled and the market seems in danger of slipping below the 11-month low hit last week, brokers said. The key December cotton contract shed 0.18 cent to close at 67.19 cents per lb.

On Friday, the contract ended at 67.08 cents. Based on the weekly charts of the contract, that was the lowest finish since the middle of August 2007. The contract moved from 67.01 to 68.05 cents. It was an inside day since the range was within Monday's 67 to 68.42 cents band. Volume traded in the December contract hit 7,299 lots at 2:37 pm EDT (1837 GMT).

The following deals were reported : 1000 bales of cotton from Tando Adam sold at Rs 4100-4150, 3000 bales from Shahdadpur sold at Rs 4075-4125, 800 bales from Sultanabad at Rs 4000-4075, 200 bales from Mirpur Khas at Rs 4075, 600 bales from Sanghar at Rs 4080-4100, 400 bales from Khipro at Rs 4075-4100, 300 bales from Jhole at Rs 4075, 200 bales from Sanjhoro at Rs 4075, 200 bales from Samandari at Rs 4100, 400 bales from Khanewal at Rs 4150, 200 bales from Jhang at Rs 4150, 400 bales from Chichawatni at Rs 4100-4125, 200 bales from Kassowal purchased at Rs 4125, 400 bales from Haroonabad at Rs 4110, 200 bales from Gojra at Rs 4100, 200 bales from Mian Chunno at Rs 4100, 200 bales from Bhawalnagar at Rs 4100, 200 bales from Burewala at Rs 4025 and 200 bales from Gale Raja sold at Rs 4075, 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%
===========================================================
37.32 Kgs 4,075.00 50 4,175.00
Equivalent-------------------------------------------------
40 Kgs 4,367.00 50 4,467.00
===========================================================

 

[rakeshmalik]

New York cotton futures climb

NEW YORK (August 21 2008): Cotton futures finished sharply higher on Wednesday, driven up late in the session when a dive below key support to lows dating back a year sparked new buying interest, brokers said. The key December cotton contract closed a steep 0.91 cent higher at 68.10 cents per lb. The contract breached support around 67.0 cents, which held three days in a row, for a dip down to an 11-1/2 month low at 66.79 cents.

But buyers quickly came in to snatch cotton up at the low, sending prices to the session high at 68.48 cents. After hours, cotton steadied around 1.77 percent higher at 68.38 cents, a 1.19 cent gain. Volume traded in the December contract hit 9,964 lots by 2:57 pm EDT (1857 GMT). Another break below 67 cents was seen leading to a low around 65.50 cents.

But the close above Tuesday's high in an outside range, meaning a lower low and a higher high, points to more upside for cotton - Mike Stevens of Swiss Financial Services in Mandeville, Louisiana. Other analysts said they thought cotton prices had fallen far enough to draw in purchases by cotton merchants. Local newspapers reported some cotton crop damage in northern Texas from recent hail and rain storms, helping lift prices.

Analysts forecast another robust US export sales figure in the USDA's weekly report due Thursday at 8:30 am. Many analysts see cotton prices moving higher in the long-term given that plantings and output in most producing countries are expected to fall sharply this season.

Lower crops should lead to stock drawdowns, helping to push prices higher in coming months. World 2008/09 cotton ending stocks are seen dropping sharply to 50.98 million bales, from 53.24 million, according to the US Agriculture Department's monthly supply/ demand report.

Brokers Flanagan Trading Corp pegged support in the December contract at 66.60 and 65.65 cents, with resistance at 68.50 and 69.30 cents. Tuesday's volume slipped to 9,860 lots from 11,145 lots on Monday, exchange data show. Open interest in the cotton market declined by 2,705 lots to 213,927 contracts open as of August 19, exchange data showed.

 

[rakeshmalik]

ICE cotton finds direction in chart-based rally
21 Aug 2008 10:05 am

New York - ICE Futures US cotton rallied off lows to post strong gains in technical trading Wednesday as the market reached for direction in light seasonal trade.

Analysts expect follow-through buying to carry cotton higher in the next session.

Most-active December futures settled 91 points higher at 68.10 cents a pound and the nearby October contract settled up 65 points at 65.50.

Futures opened unchanged and traded sideways to higher in light trade, unable to find direction. As December slipped near 67-cent support, which traders had suspected as the seasonal low, futures hit sell stops and slid to 66.79, an almost yearly low at a level last reached by the contract Aug. 30, 2007. The market subsequently bounced, blowing through Tuesday's high up to 68.22. Futures slipped back momentarily, but jumped last minute, settling above Tuesday's high at 68.10 basis December. Cotton traders are looking to charts for direction amid the seasonal trading lull accompanying the 2008 growing season, analysts said.

"The market just kind of took the elevator up a few floors on low volume," said Peter Egli, director of risk management at Plexus Cotton Ltd. in Phoenix.

Technical traders are leaning into every signal, with short covering rather than outright buying likely to lead to gains in the coming session, according to Egli. Stability in the commodities complex, especially in Chicago Board of Trade grains, is lending a degree of support to the market, he said.

"You cannot underestimate the technical reliability of outside-range sessions," said Mike Stevens, analyst at SFS Futures in Mandeville, La.

Stout resistance ranges from 68.50 to 71.50 basis December, Stevens said.

ICE daily cotton stocks decreased by 1,034 480-pound bales Tuesday to total 1.652 million bales, with 2,512 awaiting review.

ICE cotton open interested decreased by 2,705 positions Tuesday to total 213,927, according to the exchange.

Volume was estimated 11,080 lots. In options, approximately 4,435 calls and 1,578 puts traded, according to exchange data.

Close Change Range
Oct 65.60 +65 pts 64.52-65.86
Dec 68.10 +91 pts 66.79-68.22
Mar 72.86 +46 pts 71.99-73.12

 

[rakeshmalik]

Cotton Corp of India's net profit up 45 pc in FY 08

Mumbai, Aug 20, 2008 (Asia Pulse Data Source via COMTEX) -- The Cotton Corporation of India(CCI) has clocked a net profit after tax of Rs 22.55 crore in FY 2008 as against profit of Rs 15.51 crore in FY 2007, up 45 per cent, the company said.

Through direct sales to consuming mills by supplying quality cotton and better pre-and-post sales services and all-out efforts to sell cotton in overseas markets, the Corporation has achieved a turnover of Rs 1,636.83-crore in FY 08 as against of Rs 1,786.67-crore in the year-ago period, CCI said.

The reduction in turnover has been mainly due to lesser shipments in exports in FY 2008, it said.

CCI has declared a dividend of 20 per cent aggregating at Rs 5.84-crore (including tax on dividend) on share capital of Rs 25-crore to the Government, the same as last year.

The company said cotton production in the country during cotton season 2007-08 has touched a record level of 315-lakh bales as against 280-lakh bales during 2006-07. With this record cotton production, the country has emerged as the second largest cotton producing country in the world, after China, thus relegating the USA to third position, it said.

The area under cotton cultivation during 2007-08 has also gone up by around four per cent at 95.55-lakh hectares as against 91.44-lakh hectares during 2006-07.

With wide usage of hybrid or Bt seeds throughout the country as well as with farmers now adopting better and improved farm practices, the average productivity of cotton has increased by around seven per cent at 560 kgs per hectare as against 521 kgs during the previous year. Commenting on higher cotton prices, the opening cotton prices during 2007-08 had been higher by around 4-17 per cent as compared to last year. However, in view of continuous demand in exports, the cotton prices kept on rising.

Since October-end 2007 till July 2008, cotton prices had been higher by around 20 per cent to 40 per cent compared to last year.

As per estimates, cotton exports from the country expected at 85-lakh bales and the Corporation has sold 1.73-lakh bales in exports.

On the import front, like the previous year, cotton imports into the country had once again remained limited mainly to extra-long staple cottons, which were in short supply at around 6.50-lakh bales inclusive of import of around 2-lakh bales of long staple varieties contracted by mills, CCI said.

The Corporation had undertaken MSP operations for the fourth consecutive year and purchased 11.88-lakh quintals of kapas equivalent to 2.25-lakh bales valued Rs 248.64-crore in Andhra Pradesh and Orissa so as to ensure the payment of remunerative prices to the cotton growers of these states.

The intensity of MSP operations during the year has been less as compared to the previous year, CCI said.

Besides MSP operations, with a view to ensure competitive prices to the cotton farmers, the Corporation had also carried out commercial operations and purchased 7.65 lakh bales valuing Rs 921.34-crore as against 2.71-lakh bales valuing Rs 286.35-crore during the previous year. The Corporation continued to be the implementing agency for Mini Mission-III and IV of Technology Mission on Cotton and during the year, 28 market yards were taken up for development under Mini Mission III with the total project cost of Rs 60.93-crore and 180 ginning and pressing factories for modernisation under Mini Mission IV with total project cost of Rs 318.72-crore.

The Corporation continued its efforts to promote and popularise the concept of integrated cotton cultivation (contract farming) during 2007-08 and had extended the programme in all cotton growing states in an area of around 40,044-hectares through its branches as well as leading textile mills, as its associates, CCI added.

 

[rakeshmalik]

Cotton Corp buys 19.53 lakh bales

21 Aug 2008 3:09 pm

Mumbai - The Cotton Corporation of India (CCI) bought 11.88 lakh bales of cotton under minimum support price and additional 7.65 lakh bales under commercial purchase during 2007-2008, said the Corporation, which recorded higher profit of Rs 22.55 crores in 2007-08 against Rs 15.51 crores of the previous year.

Meanwhile, cotton prices held in a narrow band, dealers said Thursday. Low unsold stock ahead of new season has kept offerings slow while north and south Indian millers were steady buyers, the dealers added. Now, hardly 3.50 lakh bales of cotton are reported unsold across the country.

The new crop inflow will begin in north India next month and in October in Gujarat, a dealer said. Cotton prices are likely to remain firmer this month as new season is likely to begin with negligible unsold stock, he added.

 

[rakeshmalik]

New York Close (vs. previous week)
Oct08 65.07 -218 May09 74.33 -167
Dec08 67.08 -209 Jly09 75.78 -147 4
Mch09 72.32 -202 Oct09 78.09 -131

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Cotlook A Index (FE)
2008/09 77.90 -1.60
U.S. Exports Net Sales
Accumulative 4,071,700
Weekly 398,100
China 176,900
Turkey 50,200
Indonesia 48,500
Wkly Shipments 224,100
CCC Loan Outstanding
3,614,637, -315,665
NYK Open Interest
216,668 -2,384
Net Speculators’ Position
Short -1.6% -2.5%
NYK Certificated Stocks
1,654,400 -63,050
Awaiting review 3,459

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USDA/Major Cotton Countries – Production and consumption details for important countries are:
Production Consumption
2007/08 2008/09 2007/08 2008/09
China 35.80 (35.80) 35.50 (35.50) 52.50 (52.50) 53.50 (54.00)
India 24.80 (25.30) 24.00 (25.50) 18.40 (18.40) 18.50 (18.80)
Pakistan 8.90 (8.90) 9.40 (9.40) 12.30 (12.50) 12.50 (12.75)
Central Asia 8.35 (8.35) 7.63 (7.70) 1.58 (1.64) 1.61 (1.65)
West Africa 2.93 (2.93) 3.50 (3.90) 0.61 (0.61) 0.61 (0.60)
Turkey 3.10 (3.10) 2.30 (2.60) 6.20 (6.30) 5.70 (6.00)
Australia 0.57 (0.60) 1.20 (1.50) 0.05 (0.05) 0.05 (0.05)
Brazil 7.15 (7.15) 6.40 (6.40) 4.50 (4.50) 4.60 (4.60)



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USDA/World Production and Consumption – The 2007/08 ending stocks were lowered by 895,000
bales, mainly from the net effects of production changes in India (-500,000) and imports into China
(-750,000). In 2008/09, production (-2.8 million), consumption (-1.4) and ending stocks (-2.3) were all
lowered. USDA’s 2007/08 estimates, the latest 2008/09 projections and our usual comparisons are below:
USDA 2007/08 USDA 2008/09 Cotlook 08/09 ICAC 08/09 Reinhart 08/09
Beginning Stocks 63.03 (62.98) 60.36 (61.26) 55.6 58.3
Production 119.31 (119.91) 112.16 (114.94) 110.0 114.4 110.5
Consumption 123.63 (124.25) 124.54 (125.91) 117.8 121.0 116.5
Ending Stocks 60.36 (61.26) 50.98 (53.24) 48.9 52.3

 

[rakeshmalik]

Cotton lint unmoved in western India
21 Aug 2008 3:48 pm




Mumbai - Cotton lint was quoted firm amid sluggish trade at major markets across western India Thursday.



At Kadi market in Gujarat, cotton lint S-6 A-grade was quoted at Rs 27,800-Rs 28,200/candy while average-grade traded at Rs 27,400-Rs 27,700/candy.



In Maharashtra, the 28MM cotton lint traded at Rs 27,500-Rs 27,800/candy; 29MM cotton lint traded at Rs 28,000-Rs 28,200/candy; while 30+MM cotton lint traded at Rs 28,300-Rs 28,600/candy; and 31+MM cotton lint traded at Rs 28,800-Rs 29,100/candy.



At Sendhwa market in Madhya Pradesh, the 28+MM cotton lint traded at Rs 27,500-Rs 27,800/candy; 29MM cotton lint traded at Rs 28,000-Rs 28,200/candy; 30+MM cotton lint traded at Rs 28,300-Rs 28,600/candy; and 31+MM cotton lint at Rs 28,800-Rs 29,100/candy; and DCH variety traded at Rs 31,000-Rs 32,000/candy.

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Cotton lint pauses in north India
21 Aug 2008 3:46 pm

Abohar – Cotton lint prices remained stable amid lack of fresh deals from millers at major markets across north India Thursday. Sellers are not in a hurry to make deals due to the current higher rates.

In Punjab, cotton lint traded at Rs 2,810-Rs 2,825/maund at Budhaldha, Taapa and Rampura; Rs 2,800-Rs 2,810/maund at Malot and Bathinda; Rs 2,790-Rs 2,800/maund at Abohar; and Rs 2,790/maund at Manasa.

Cotton lint traded at Rs 2,710-Rs 2,750/maund in Haryana and at Rs 2,700-Rs 2,720/maund in Rajasthan.

New crop October full delivery was quoted at Rs 2,575-Rs 2,620/maund in Punjab.

 

[rakeshmalik]

Cotton prices firm up again

LAHORE (August 22 2008): After lolling on the lower side over the past couple of days on perception of good weather and increased seedcotton (kapas/phutti) arrivals, lint prices turned steady to tight again on Thursday primarily due to weakening of the Pakistan rupee against the United States dollar which was said to have fallen to Rs 76.50 at one time in the afternoon.

It may be recorded, however, that the Karachi Cotton Association (KCA) had earlier decreased its ex-gin price of grade three cotton by Rs 125 per maund (37.32 kgs) on last Wednesday and again Rs 50 per maund on Thursday, or a total of Rs 175 per maund and fixed it at Rs 4025 per maund today.

Last Wednesday's positive performance on the New York cotton futures market also appeared instrumental in imparting a notion of steadiness to the local market because global buyers and millers at different origins and markets found it fit to fix their uncovered positions. After all, the long term scenario of cotton supply during the current season (2008-2009) is technically bullish due to relatively lower supplies and decreasing carryover stocks into the next season (2009-2010).

Some concerns regarding damage to cotton crop in Texas, the leading cotton producer in the USA, have also come to light. Thus the settlement prices on the New York cotton futures market on last Wednesday were on the strong side. Good activity of exporters in Pakistan is also having a salutary effect on fibre prices.

After some cessation of cotton processing by the ginning factories in recent past due to the rains, now again the ginners are rolling out about 15,000 bales daily in Sindh and Punjab put together. With good weather now creating favourable conditions due to approaching end of monsoon rains, traders have become hopeful again that Pakistan may harvest an output of 12 million domestic size bales this season on an ex-gin basis. Some projections even put it at 12.5 million bales.

Generally speaking, seedcotton (kapas/phutti) prices in Sindh reportedly ranged higher from Rs 1,850 to Rs 1,925 per 40 kgs on Thursday, while in the Punjab they are said to have ranged from Rs 1,700 to Rs 1,950 per 40 kgs according to the quality. Lint prices also increased appreciably and ranged from Rs 4,075 to Rs 4,100 per maund (37.32 kgs) in Sindh, while they are said to have ranged from Rs 4,025 to Rs 4,075 per maund in the Punjab as per quality with ginners even demanding higher rates.

Textile industry is still mostly struggling to improve its viability. Ultimately, due to global glut in spinning capacity and stiff competition, some of the units may have to close down sooner or later.

Moreover, those industries who have taken loans in foreign currency basis like the US dollars, will find it hard to repay them. Of course, textile sales in the export markets may benefit due to the weaker Pakistani rupee.

Brokers said in Karachi on Thursday that lint prices went up by about Rs 100 per maund (37.32 kgs) in Sindh, while in the Punjab they shot up by Rs 100 to Rs 150 per maund compared to a day earlier. In Sindh, 400 bales of cotton each from Sanghar and Mirpurkhas both sold at Rs 4,075 per maund (37.32 kgs), while 400 bales each from Tando Adam and Shahdadpur sold at Rs 4,100 per maund.

Though sales reports from Punjab were not readily available till the afternoon, ginners were asking for Rs 4,100 for a maund of their cotton with demeanour of the market remaining steady. It was also learnt that with resumption of ginning in some areas which were previously affected by recent rains and floods, about 15,000 bales of cotton are now being ginned daily. According to current reports, weather in the cotton belt is turning dry with only limited pockets in cotton belt still facing vagaries of floods.

According to trade and textile circles, a meeting of the agriculture research subcommittee of the Pakistan Central Cotton Committee (PCCC) was held in Lahore on Thursday to discuss and decide/approve procedures in respect of multi-location research trials of bollgard cotton hybrids in collaboration with Messrs Monsanto under conditions prevailing in Pakistan.

Others interested in this field include the Centre of Excellence for Molecular Biology (CEMB), an institute of the Punjab university, and Messrs Ali Akbar seeds, a venture of the private sector. According to sources concerned with these enterprises, it might take another two or three years before Bt cottons are introduced as approved varieties in Pakistan.

The meeting was presided over by the Cotton Commissioner, Ministry of Food and Agriculture (Minfal) and was also represented by nominees of the All Pakistan Textile Mills Association (Aptma), the Karachi Cotton Association (KCA).

The Pakistan Cotton Ginners Association (PCGA), besides leading scientists from federal and provincial governments and agricultural institutions. Representatives of Monsanto who attended the meeting also gave a suitable presentation on the occasion. The month of Ramazan is expected to begin on the 2nd or 3rd of September 2008 when business activity would slow down.

 

[rakeshmalik]

New York cotton futures climb

NEW YORK (August 21 2008): Cotton futures finished sharply higher on Wednesday, driven up late in the session when a dive below key support to lows dating back a year sparked new buying interest, brokers said. The key December cotton contract closed a steep 0.91 cent higher at 68.10 cents per lb. The contract breached support around 67.0 cents, which held three days in a row, for a dip down to an 11-1/2 month low at 66.79 cents.

But buyers quickly came in to snatch cotton up at the low, sending prices to the session high at 68.48 cents. After hours, cotton steadied around 1.77 percent higher at 68.38 cents, a 1.19 cent gain. Volume traded in the December contract hit 9,964 lots by 2:57 pm EDT (1857 GMT). Another break below 67 cents was seen leading to a low around 65.50 cents.

But the close above Tuesday's high in an outside range, meaning a lower low and a higher high, points to more upside for cotton - Mike Stevens of Swiss Financial Services in Mandeville, Louisiana. Other analysts said they thought cotton prices had fallen far enough to draw in purchases by cotton merchants. Local newspapers reported some cotton crop damage in northern Texas from recent hail and rain storms, helping lift prices.

Analysts forecast another robust US export sales figure in the USDA's weekly report due Thursday at 8:30 am. Many analysts see cotton prices moving higher in the long-term given that plantings and output in most producing countries are expected to fall sharply this season.

Lower crops should lead to stock drawdowns, helping to push prices higher in coming months. World 2008/09 cotton ending stocks are seen dropping sharply to 50.98 million bales, from 53.24 million, according to the US Agriculture Department's monthly supply/ demand report.

Brokers Flanagan Trading Corp pegged support in the December contract at 66.60 and 65.65 cents, with resistance at 68.50 and 69.30 cents. Tuesday's volume slipped to 9,860 lots from 11,145 lots on Monday, exchange data show. Open interest in the cotton market declined by 2,705 lots to 213,927 contracts open as of August 19, exchange data showed.

 

[rakeshmalik]

China July cotton imports dip 7.2pc
22 Aug 2008 8:45 am

- China's cotton imports in July fell 7.2 per cent on year to 212,506 metric tons, the General Administration of Customs said Friday.



In the January-July period, cotton imports rose 3.5 per cent to 1.45 million tons.



China is the world's largest cotton importer, and gets most of its supplies from producing countries such as the US, Uzbekistan and Australia.