Cotton

Cotton future contracts settled
2 May 2008 11:18 am

Mumbai - The settlement of benchmark April cotton contract on the National Commodity and Derivatives Exchange (NCDEX) was done at Rs 508/20kg on April 30. Similarly, April cotton contract on the Multi Commodity Exchange (MCX) expired at Rs 505.10/20kg.

Cotton Prices Look Stabilized (Mid-Week Update)

1 May 2008 - Cotton prices stayed unchanged over the last three days in New York, in line with other commodity futures. The current return to the 70-cent level may however be short lived if more bad economic news would again shift speculation from stocks to commodities. The US Fed Wednesday further lowered its interest rates, but could limit its support to the US economy in the coming period in order to limit inflation

Exporters facing difficulty in getting payment from US-based firm

KARACHI (May 03 2008): Exporters are facing difficulty in getting the payment of some $30 million from a US-based firm due to the government's inaction, sources said on Friday. Consignments of some 400 containers of home textile products worth $30 million have been lying stuck at US ports for the last four months after a US company - Dan River owned by an Indian investor, declared itself bankrupt.

Sources said that the government is presently busy in resolving the judicial issues and has no time to even look into the matter of stuck up consignments. They said that unlike Pakistani government, the US government strongly backs its local investors legally and financially. According to US laws once local a firm files bankruptcy under chapter IX, the payments for already bought products are not made, they added.

Whereas, Pakistan has no proper system to protect its people and investors particularly issues they face on international front, sources said.

Sources said that exporters have also hired a lawyer to fight the case in the US court to resolve the issue but despite that the issue seems to be worsening. They further said that despite being approached by the exporters, the government has yet to give any response.

Sources said that there are consignments of 24 Pakistani companies lying on the US ports. The exporters have demanded that their home textile products should either be sent back to Pakistan or the firm should make payment immediately. They said that ports demurrages are also piling up with every single day.

Cotton lint advances in Gujarat
2 May 2008 5:25 pm

Mumbai - Spot cotton lint prices increased marginally amid slight improvement in demand in Gujarat, while the commodity traded unchanged across Maharashtra and Madhya Pradesh Thursday.

A trader say, around 307 lakh bales of cotton lint has arrived in the markets across the country during the current season. Export deals were made for 82 lakh bales while shipment was of 72 bales. The unsold stock is estimated at 23.5 lakh bales, the trader adds.

At Kadi in Gujarat, cotton lint S-6 A-grade was quoted between Rs 22,300-Rs 22,700/candy while average-grade traded at Rs 21,700-Rs 22,100/candy. Kapas got offered at Rs 520-Rs 605/maund. The State recorded arrivals of 20,000 bales today.vardman group bought around 10,000 bales at Rs 22500-22700.

In Vidarbha region of Maharashtra, the 28-mm cotton lint traded at Rs 21,300-Rs 21,600/candy; 29-mm cotton lint traded at Rs 21,800-Rs 22,100/candy. Around 9,000 bales arrived in the State today.

At Sendhwa market in Madhya Pradesh, the 28-mm cotton lint traded at Rs 21,600-Rs 21,900/candy; 29-mm cotton lint traded at Rs 22,100-Rs 22,400/candy; and 30/31-mm cotton lint at Rs 22,400-Rs 22,900/candy. Around 1,000 bales of cotton lint reached here today.

Cotton lint rises in north India

2 May 2008 4:49 pm


Abohar - Spot cotton lint trading higher by Rs 10-Rs 15/maund limited stocks and improved buying from millers at the spot markets across north India Friday. Traders say, prices will remain higher due to declining stocks.

A trader say, around 307 lakh bales of cotton lint has arrived in the markets across the country during the current season. Export deals were made for 82 lakh bales while shipment was of 72 bales. The unsold stock is estimated at 23.5 lakh bales, the trader adds.

Across Punjab, cotton lint traded at Rs 2,450-Rs 2,455/maund at Fazilka, Kotakpura, Muktasar and Bathinda; Rs 2,450-Rs 2,455/maund at Malot and Gidarbha; Rs 2,440-Rs 2,445/maund at Abohar; Rs 2,425-Rs 2,430/maund at Manasa; and at Rs 2,460-Rs 2,465/maund at Rampura, Barnala and Budhaldha.

Cotton lint traded at Rs 2,280-Rs 2,350/maund in Haryana and at Rs 2,150-Rs 2,270/maund in Rajasthan.

Grower sales rise on The Seam, as trade side falters (22:24 GMT 2nd May, 2008)
Most New York futures ended on positive ground (19:52 GMT 2nd May, 2008)
No. 2 cotton futures mostly higher at midday (16:53 GMT 2nd May, 2008)
Stormy weather forecast for southern US cotton growing areas (14:49 GMT 2nd May, 2008)
Asian mill buying quickens following drop in New York (11:34 GMT 2nd May, 2008)
Zimbabwe's main harvest period imminent (8:57 GMT 2nd May, 2008)
Business sales pick up on The Seam (21:09 GMT 1st May, 2008)
ICE cotton futures make sharp move lower (19:30 GMT 1st May, 2008)
ICE cotton futures trading lower (16:32 GMT 1st May, 2008)
Windy, slightly cool weather reported from Far Western US to West Texas (12:56 GMT 1st May, 2008)
US Export Sales - in detail (12:48 GMT 1st May, 2008)

New York Close (vs. previous week)
Jly08 69.56 -188 Mch08 82.14 -194
Oct08 74.52 -187 May09 83.54 -177 4
Dec08 77.84 -220 Jly09 84.60 -191

Cotlook 07/08 A (FE)
72.90 -125
U.S. Exports Net Sales
Accumulative 12,766,800
Weekly 649,900
China 430,500
Indonesia 46,900
Turkey 39,400
Wkly Shipments 197,500
NYK Open Interest
248,739 -1,712
Net Speculators’ Position
Long 10.3% -0.8%
NYK Certificated Stocks
1,213,546 +97,462
Awaiting review 142,213

May 02, 2008



The nearby July contract slipped below 70 cents on the week, marking its first venture there since February. The contract traded to a low of 69.52 on Thursday, but rebounded at the end of the week in the face of improving prices in other commodity markets as well as improving export sales. The midweek sell off was in line with the improving value of the U.S. dollar and the decline in other commodity prices. Cotton’s fundamentals continue to pressure prices near term. However, the upper sixty cent level should provide good price support. The new crop December fell below 80 cents and its longer term price level will be closely tied to crop conditions in the Northern Hemisphere. A U.S. crop in excess of 15 million bales or a world crop above 118-119 million bales will make the low eighty cent level very difficult to scale.

While the value of the U.S. dollar continues to slip in world currency markets, the dollar is demonstrating numerous signs that its long down trend may be coming to an end. This, in turn, has placed pressure on all commodity prices as once the dollar stabilizes and begins to trend higher, then the more foreign currency that will be required to purchase a fixed amount of cotton, or any other commodity. Generally, the U.S. dollar trades inversely to cotton since cotton is an export commodity. This is a natural tendency as the lower the value of the dollar, the less foreign currency is required to purchase U.S. cotton. That is, there is a tendency for the demand for cotton to increase as its price--in local currency--moves lower.

Certificated stocks are also part of the equation that is keeping a tight lid on prices. Stocks now total 1,213,546 bales with another 142,213 bales awaiting review. Longer term, these stocks will erode the value of December futures, unless they can be significantly reduced and move into the export market. While I have been bullish the new crop December 2008 contract, should certificated stocks fail to move into the export market, and the U.S./world crops surpass expectations, then the market will find it difficult to not only hold the current 78 cent level, but will face pressure to hold above 72-73 cents, basis December.

Bullish export sales resulted during the week ending April 24, 2008 as net sales totaled 649,900 RB. Upland sales totaled 642,700 RB as most notably China made large purchases of Upland. Upland sales totaled 642,700 RB while Pima sales were 7,200 RB. China (429,700 RB); Indonesia and Turkey were the primary buyers of Upland. India (3,300 RB); Thailand and Turkey were the primary buyers of Pima. Export shipments continue to be well behind the pace necessary to meet the USDA export estimate of 14.5 million bales. Weekly exports totaled only 197,500 RB with Upland accounting for shipments of 159,900 RB. Pima shipments were a marketing year high at 37,600RB. Primary destinations for Upland were China (32,000 RB); Mexico and Indonesia. The primary destinations for Pima shipments were China (23,500 RB); India and Pakistan.

As previously noted, I have been bullish the 2008 crop futures contracts, the December 2008 through the July 2009 contracts. However, I must now entertain the possibility that those contracts will have difficulty moving much higher than their respective price level. Yet, I continue to remain very bullish cotton as the looming food crisis is well entrenched and cotton, at some point must increase. Yet, for now, and unlike other commodities, world cotton supplies are well in excess. This excess will keep pressure on prices.

Cotton lint at record high in north

Abohar - Spot cotton lint prices jumped higher to touch the season's high at the spot markets across north India Saturday. At Bhiki, cotton lint traded at record high of Rs 2,500/maund. Traders say, fresh arrivals have almost stopped and the stock available in the market is negligible. Therefore, the needy millers are buying at the market price for fuflfilling their requirement.

Meanwhile, world cotton mill use is projected to remain stable at 26.7 million tons in 2008-09 amid slower world economic growth and higher prices of cotton relative to polyester, the International Cotton Advisory Committee said Thursday in a press release. Global cotton production is expected to remain near unchanged at 26.2 million tons in 2008-09, up slightly from 26.18 million the previous year.

World ending stocks are projected lower at 11.4 million tons in 2008-09 from 11.9 million tons the previous year. Despite stagnant consumption, world exports are expected to increase to 8.6 million tons from 8.13 million tons due to higher expected imports by China, ICAC said.

Across Punjab, cotton lint traded at Rs 2,470-Rs 2,475/maund at Fazilka, Kotakpura, Muktasar and Bathinda; Rs 2,470-Rs 2,475/maund at Malot and Gidarbha; Rs 2,460-Rs 2,465/maund at Abohar; Rs 2,440-Rs 2,445/maund at Manasa; and at Rs 2,490-Rs 2,495/maund at Rampura, Barnala and Budhaldha.

Cotton lint traded at Rs 2,300-Rs 2,370/maund in Haryana and at Rs 2,180-Rs 2,300/maund in Rajasthan.