Cotton

23-05-2008
New York Close (vs. previous week)
Jly08 69.21 -275 Mch08 83.51 -179
Oct08 74.51 -291 May09 84.81 -180
Dec08 78.01 -264 Jly09 85.96 -181

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May 23, 2008
Cotlook 07/08 A (FE)
75.10 +1.15
U.S. Exports Net Sales
Accumulative 13,737,500
Weekly 153,200
China 40,800
Thailand 22,700
Mexico 20,200
Wkly Shipments 268,900
NYK Open Interest
265,231 +8,719
Net Speculators’ Position
Long 11% +0.6%
NYK Certificated Stocks
1,504,542 +70,738
Awaiting Review 66,138

U.S. Crop 2008/09 – Total sowing jumped to 49%, compared to 36% last
week, 55% at this time last year, and a five-year average of 59%. Mississippi and Tennessee are behind
in the plantings at 37% and 24% against their five year average of 85% and 61%, respectively. Warm
and dry weather has allowed fieldwork to expand rapidly and provided the much needed heat units.
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INTERNATIONAL
Uzbekistan – Thanks to very favorable weather, planting was finished in mid-April. An area of 1.4 million
hectares has been planted to cotton this season, of which 14,000 are to ELS varieties. Under normal
weather conditions, it should result in a total production of 3.6 million tons of seed cotton, equal to a yield
of about 850 kgs./hectare of fiber cotton or 1.1 million tons of lint. A lot of attention has been paid to the
steady improvement of the seed varieties. Fifteen different Upland varieties have been planted this
season and, on nearly half of the production area, seven faster developing varieties were sown.
Turkmenistan – Approximately 30,000 tons of fiber cotton, including around 7,000 of ELS, of the
2007/08 crop remain unsold at the origin. Sowing for the 2008/09 crop has been completed due to the
very favorable spring weather for the fieldwork and practically no replanting was necessary. Cooler
temperatures and rainy weather prevailed during the first half of May, which was beneficial for the
germination of the plants. However, general water shortages have been reported from the regions.
Expectations are for a total production of about 300,000 tons of fiber cotton, including 18,000 of ELS.
Kazakhstan – For usual climatic reasons, the planting always lags behind in the northernmost growing
region of Central Asia. According to official information, cotton will be planted on about 180,000 hectares,
down from the 200,000 in 2007/08. For years, experts have recommended reducing the area for cotton
production, as there are not enough water resources available for such an irrigation intensive crop.
Tajikistan – We do not expect that the planting target of 254,000 hectares will be achieved this year, thus
a final production of only about 105,000 tons fiber cotton, which includes close to 5,000 of ELS cotton,
can be expected for the upcoming 2008/09 crop.
Central Asia – Early estimates point to an overall expansion of the crop and consumption. Please refer
to the table below for our first crop and use estimates of the 2008/09 season, compared to 2007/08:
Production 2008/09 Production 2007/08 Consumption 2008/09 Consumption 2007/08
Uzbekistan 1,100,000 1,050,000 280,000 250,000
Turkmenistan 300,000 280,000 120,000 100,000
Kazakhstan 130,000 100,000 15,000 12,000
Tajikistan 105,000 135,000 20,000 20,000
Azerbaijan 40,000 30,000 15,000 10,000
Kyrgyzstan 30,000 30,000 3,000 3,000
Total 1,705,000 1,625,000 453,000 395,000

Spun Yarn Prices in India (Monthly Report)

23 May 2008 - Spun yarn prices are mixed in India this month with cotton yarn prices staying unchanged while viscose, polyester and blended yarn prices are declining, as indicated by our series of price tables. With cotton prices further rising in the past weeks, spinners have seen a reduction in their margins. On the higher end of the market, ELS cotton production was halved, therefore boosting imports, our India Correspondent reports

U.S. Administration Will Not Investigate Apparel Imports from Vietnam
22 May 2008

The United States will not impose anti-dumping duties on apparel imports from Vietnam in the short term, the U.S. Department of Commerce officially announced this week. Unit prices of Vietnamese apparel monitored by the U.S. administration were not reduced, it said. First 2008 data compiled by EmergingTextiles are confirming this trend. With labor and raw material costs surging in Vietnam, exporters warned they could further raise prices, on the contrary.

U.S. trade officials once again renounced in launching an anti-dumping investigation on apparel imports from Vietnam.

In a declaration released earlier this week, the U.S. Department of Commerce said there is "insufficient evidence" for triggering such a procedure.

The U.S. administration started monitoring certain categories of imports from Vietnam in the last year in order to answer requests from the U.S. textile industry.

Booming Exports from Vietnam
>>>>>>>>>
Although imports from Vietnam surged after quotas were eliminated in January 2007, there is no clear sign that a sharp reduction in prices is behind such a boom.

Scrutinized categories include trousers, shirts, underwear, swimwear and sweaters.

The monitoring covered the six-month period between August 2007 and January 2008.

Many of the tariff lines had rising unit values indicating that dumping is not taking place, said the Department of Commerce.

A comparison with similar imports from a series of other low-cost countries did not give evidence of dumping, in addition.

The same observation could have been made with first 2008 data which were compiled by EmergingTextiles (see our tables below).

Like in other emerging countries in Asia, apparel exporters in Vietnam may now be forced raising their prices, on the contrary, due to higher labor and raw material costs.

Ending in January 2009
Inflation rates reached more than 21% in April in Vietnam.

Although it warmly welcomed the DOC's conclusions, Vietnam's textile and apparel association Vitas again asked the United States to put an end to the monitoring program which is against WTO's rules and negatively affects the business, it said.

The U.S. trade administration will further monitor imports from Vietnam, it however announced, with results of the new review expected in six months. The program will expire with the Bush administration on January 19th, 2009.

Water shortage hits cotton sowing in pakistan

HYDERABAD (May 24 2008): Acute water shortage has hit cotton sowing in Badin where growers are facing heavy financial losses. Growers of five Talukas are facing the onslaught as standing sugarcane, banana, and vegetable crops are not being supplied water. They have held several demonstrations demanding of irrigation minister and concerned officials to ensure regular water supply, but in vain.

The Sindh Abadgar Board Badin official Shah told this correspondent that water shortage has artificially been created as there is no such shortage in irrigation system, and alleged mismanagement for the shortage. Lack of planning has put growers on stake. Tail-enders are worst sufferers because of landlords who allegedly procure water from the staff, he lamented.

He said the system is old and branches, minors and canals are filled with silt. He said though the department gets sufficient funds every year for silt cleaning but the work is rarely carried out. The department also does not involve growers' association in it, he added. In Badin, he said, more than 50 percent growers are still waiting for water to sow their cotton crop.

Cotton lint trades up in north India
24 May 2008 3:10 pm

Abohar - Spot cotton lint continued to trade higher by Rs 10-Rs 15/maund amid consistent buying from millers at major markets across north India Monday. Mills want to complete covering as soon as possible looking at the ending stocks.

Across Punjab, cotton lint traded at Rs 2,645-Rs 2,655/maund at Fazilka, Kotakpura, Muktasar and Bathinda; Rs 2,635-Rs 2,645/maund at Malot and Gidarbha; Rs 2,635/maund at Abohar; Rs 2,625/maund at Manasa; and at Rs 2,665-Rs 2,670/maund at Rampura, Barnala and Budhaldha.

Cotton lint traded at Rs 2,515-Rs 2,555/maund in Haryana and at Rs 2,420-Rs 2,480/maund in Rajasthan

Steady trend seen on cotton market

KARACHI (May 25 2008): Firmness prevailed on the cotton market on Saturday as the official spot rate did not show any further rise as buyers just in shock kept on the sidelines due to soaring prices, experts said. The Karachi Cotton Association (KCA) official spot rate was inert at Rs 3600, dealers said. A few buyers were active, made purchasing between Rs 3950-4000, they said.

Commenting on the fresh rains in the cotton growing areas, they said that rains are timely and good for the new crop and it is expected that the production may show significant improvement by the time of harvesting.

Some other dealers said that the overall situation is dull in the market partly because of other items along with cotton were going up, which is reducing purchasing power and this is very alarming not only for the nation, the whole world is facing the same situation.

No doubt that buyers were doing business in a proper way but some of them appeared a little bit confused after sharp fluctuations in the rise and oil prices the world over, dealers said. "There seems to be no one interested in cotton because there are better bets to place in crude oil, gold and rice," said Keith Brown, a cotton markets analyst in Moultrie, Georgia.

Traders observed that prices could decline further before the next cotton shipment sales data due from the US Department of Agriculture, (USDA). On Friday, the US cotton futures ended down one percent, off the session's 5-1/2 month lows, as the market continued to languish from a lack of interest not seen in many other commodities.

The benchmark July cotton contract on ICE Futures US closed down 0.69 cent at 69.30 cents per lb, trading from 70.45 to 67.85 cents - a low dating back to January 14. The new-crop December cotton contract lost 0.70 cent to finish at 77.97 cents, dealing from 79.07 to 76.55 cents.

The following deals were reported: nearly 1000 bales of cotton from Harapa sold at Rs 3950 and same figure transacted at Rs 4000 between exporter and mill, they 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 3,600.00 50 3,650.00
Equivalent-------------------------------------------------
40 Kgs 3,858.00 50 3,908.00
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New York cotton futures settle down

NEW YORK (May 24 2008): US cotton futures ended down 1 percent on Friday, off the session's 5-1/2 month lows, as the market continued to languish from a lack of interest not seen in many other commodities. "There seems to be no one interested in cotton because there are better bets to place in crude oil, gold and rice," said Keith Brown, a cotton markets analyst in Moultrie, Georgia.

The benchmark July cotton contract on ICE Futures US closed down 0.69 cent at 69.30 cents per lb, trading from 70.45 to 67.85 cents - a low dating back to January 14. The new-crop December cotton contract lost 0.70 cent to finish at 77.97 cents, dealing from 79.07 to 76.55 cents.

Traders said prices could decline further before the next cotton shipment sales data due from the US Department of Agriculture. USDA said on Thursday total US weekly cotton sales amounted to 197,800 running bales (RBs, 500-lbs each), down from 241,800 RBs previously.

The USDA has targeted a total shipment of 14.2 million (480-lb) cotton bales for the current year. Brokers said they need to average over 300,000 RBs to reach the USDA projection. Brokers Flanagan Trading Corp put support for the July cotton contract at 67.50 cents.Open interest in the cotton market rose 3,597 lots to 268,828 lots as of May 22.

Brazil cotton output lower

WASHINGTON (May 24 2008): Brazilian cotton production is expected to ease slightly to 1.42 million metric tonnes in 2008/09 from 1.56 million tonnes in the prior growing season, a US Agriculture Department attache in Brasilia said on Thursday. "Farmers are already purchasing fertiliser and other inputs for next year's crop, even though the current harvest has barely begun," the attache said.

The report said because production in 2007/08 remained largely the same as the previous year, exports in 2008/09 are expected to increase by 25 percent to a record 630,000 tonnes from 500,000 tonnes. A separate attache report from New Delhi said strong demand for cotton will see imports rise 6.7 percent in Bangladesh to 640,000 tonnes in 2008/09

TEXTILES EXPORT

Merchandise exports, particularly textiles, witnessed only a gradual growth during a major period of 2007-08. Besides historical factors, the main contributory factors have been the appreciation of the Indian Rupee by around 15% since October 2006 vis-à-vis the US Dollar, and a perceptible slowdown of the US economy.

The Government has taken steps in the short, medium, and long terms to provide relief to exporters. As part of a short term strategy, the Government has enhanced the Duty Entitlement Pass Book (DEPB) and Duty Drawback Rates, exempted Service tax on 12 services, reduced interest rates on pre-and post shipment credit, and facilitated faster clearance of arrears of terminal excise duties and Central Sales Tax. As a part of the medium term strategy, the Government has decided to continue with the Technology Upgradation Fund Scheme, Scheme for Integrated Textiles Parks and the Technology Mission on Cotton in the XIth Five Year Plan. In the long run, there is a need for improvement in the infrastructure, labour law reforms, and create a new business orientation by the industry in line with the global trends.

In spite of a difficult global scenario, the Government is confident of achieving the exports targets set out in the National Textiles Policy, 2000, and the Working Group on Textiles and Jute Industry for the XIth Five Year Plan. In 2007-08, the Textiles exports were US$ 20.5 billion, against the target of US$ 25 billion, registering a growth of 9.4% in dollar terms against exports in 2006-07. The exports grew only by 1.49% between April-October 2007, but the situation improved radically in the later half of the fiscal, registering a total growth of 9.4%.