Cotton

National Textiles Corporation

Due to untiring efforts of the Government, the Modified Revival Scheme (MRS) for the National Textiles Corporation (NTC), at an estimated cost of Rs. 5,267 crore, was approved by the Board for Industrial & Financial Reconstruction (BIFR) on March 28, 2006. It was approved by the Government on December 5, 2006. This scheme will be financed through interest free loans of Rs. 528 crore from the Government of India, and Rs. 4,739 crore will accrue from the sale of land and other assets.

Progress :

•The first major sale of 5 mills land in Mumbai by the Corporation

between the months of January to July, 2005 at a consideration

of Rs. 2,200 crore.

• The above funds were the main source for initiating the Revival

Scheme

• Modernisation of 22 mills at a cost of Rs. 530 crore.

• 15 mills will be modernised by May 2008.

• Mobilized Rs. 4,033 crore by sale of assets of the closed mills

and surplus assets of the viable mills.

• Closed down 67 unviable mills and 2 mills had been handed

over to Government of Puducherry.

• Paid Rs. 2,100 crore towards MVRS compensations to its

employees in the closed mills.

• NTC proposes to develop an Indian Textiles Plaza in

Ahmedabad, and an International Trade Tower at Mumbai.

Looking Ahead

In the last four years, the UPA Government has taken important steps to place the Indian textiles industry on a robust footing. Today, the industry is increasingly embracing modern technology and work processes, becoming more globally competitive, building strong brand equity for its products, and consistently achieving higher growth rates than ever in its long history. But the task is incomplete. The challenges are many. The Government is committed to transform what is today an emerging or sunrise sector, into a developed industry.

Spot rate at Rs 3600, price in ready business at Rs 4000 mark historic peak

KARACHI (May 26 2008): The cotton rate stayed firm as short supplies and continued rising dollar kept buyers on heels as they have to meet order in hand, though at least in couple of cases prices touched Rs4,000 and spot rate at Rs3,600, marking historic peak.

WORLD SCENARIO:

The cotton trading on the NYCE depicted softness owing to first favourable growing weather in US cotton belt, besides modest investors sales, firm dollar and weak signal from Chicago.

The opening rates on Monday July was down 0.15 cent to 71.81 and new crop December down 0.04 cent to 80.61 cents a pound. The pressure players didn't like to be ruling the market and contracts. They were hoping contracts should maintain 72 cents and more to wind its way up. Analysts said the December contract was ready to take over from July shortly.

On Tuesday, trend followed suit on similar grounds as disappointed players called the situation as something of no man's land. They observed that the contracts appeared to rise but lacked follow through buying. The support had come from rising oil and grains rate. With practically nothing offered inspirational from the market, players would pin hope in USDA report on weekly export sales which often infuses life into market, players like. Intense wait onward will also be for day to day development in cotton belts.

On Wednesday futures ended with gains supported by investors buying, besides some essential crops too extending. However, what had its dominating impact was oil at record dollar 132 a barrel - Vexed players talked about fundamentals that have been keeping constantly weak. Still an eager watch is being maintained on weekly export sales within next few hours, traders floating guesswork, which quite often fails to reflect the true emerging numbers. The July contract added 0.21 cent to 70.98 cents and December got better by same amount to 79.83 cents a pound.

On Thursday, cotton futures settled lower on investor fund sales inspired by a sell-off in other commodity markets, with brokers saying the momentum from the downturn may lead to further losses in the market. ICE Futures' July cotton contract fell 0.99 cent to close at 69.99 cents per lb, trading from 69.76 to 71.75 cents. The new-crop December cotton contract lost 1.16 cents to 78.67 cents, dealing from 78.41 to 80.50 cents. Volume traded in the July contract at 3:01 pm (1901 GMT) was at 15,454 lots while December's tally was at 5,347 lots.

The weekly export sales had drawn little inspiration on the NYCE but as usual investors fund sales which pulled futures value down, besides the grain sell off also affected. The cotton sales were marked at 197,800 RBs, below previous week, similarly shipments stood at 268,900 RBs again down compared with last week.

On Friday market continued downtrend for lack of interest naturally because most players are looking for strong fundamentals or USDA various reports to get inspiration and set the market on positive path. The weekly export sales fuelled to give a jerk to futures. The July contract shed 0.69 cent to 69.30 cents a pound while December shed 0.70 to 77.97 cents a pound.

LOCAL TRADING:

The textile products exporters appeared nearly nervous as the imported stocks were not likely to meet the good amount of orders in hand and much to the delight of ginners remainders were sold at desired amount. The spot rate at Rs3,500 and asking rate at Rs4,000 per maund both had reached at historic peak.

The Monday trading was heart rending for the buyers who seemed to have more orders than raw materials in hand. The sellers were at ease as their perception to reap higher harvest was ahead.

The trading on Tuesday backed ginners view as prices showed rising level in two deals of 2000 bales which were finalised at Rs3,450 and Rs3,750 per maund. The quantitatively lower lifting proved consumers were constrained to do, as, perhaps, consumers were convinced there was no way out. According to market sources, if they completely ignore to patronise, the growers will turn to some other crops as the shortfall shows growers are disappointed souls. Meanwhile, dollar's rise locally is causing a lot of problems including low purchases being seen on the market.

On Wednesday trading nearly came to an end with 800 bales changing hands. Such condition is marked when both sellers and buyers develop perception about things to come. Or both talk about prices to have come to favour them. The two deals however, were lifted at higher end - Rs3,600 to Rs3,840 per maund. The spot rate stayed at Rs3,475. Both buyers and sellers wait with hope about arrival report likely to offer favour to either of them.

As was expected cotton was firmer as spot rate was pulled higher by Rs25 to Rs3,500 while nearly 6000 bales changed hands in ready at higher asking prices ranging between Rs3,650 and Rs4,000. The cotton consumers have been generally to terms with rising trend of all commodities.

On Friday spot rate hoped by Rs100 to Rs3,600 making a history. As is usual every govt move, the sources said is taken seriously such as one imposition of 35 percent LC margin on oil and other items. As far as govt is concerned it expects continuous rise in inflation which has been cause of worry today. However, buyers stayed on the sideline and no deal was transacted on Saturday.

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. About 2000 bales changed hands, prices remained at Rs3,950-4,000.

NEEDED VIGILANCE ON COTTON FRONT:

Elections bore hope that authorities will attend to problem of low cotton yield, as with passage of time textile manufactures would need over 20 million bales. But unfortunately they have their own more important issue to settle. One can only pray that at some appropriate moment they can attend to cotton production and textile exports.

Uplift of farm sector and textile exports had been and should be heeded as per their importance. There was need to have built up at least one knowledge-based sector, the information technology type. The fact behind this neglect is very ugly. If there was any desire to see economy and country on road to progress like Thailand, Taiwan and South Korea, Pakistan would not have been left far behind than the named countries who began the march together. Pakistan today stands no match to them. The new set-up as soon as free from the rigmarole would do right the wrong with cotton, cotton production, and setback to textile exports.

The most urgent is to cultivate Bt cotton. The government has been trying to reap good harvest but it has proved no better than the seeds have been in use.

Unfortunate part of the story is that Bt cotton has not been giving the yield being harvested for the last couple of years and it is being tried to meet utter failure. It is not clear who are of course the disappointed souls, importing Bt cotton seed from India. It is also not clear where the Bt cotton seed was acquired which proved damned failure. According to report the Bt cottonseed is being acquired from India where it has been a huge success.

But while the report calls the Bt cotton import "illegal" also states that seed is sub-standard and is doubted whether at the end of the session proves a big mistake. The sowing of conventional seeds have been started though they are considered late and under the circumstances both good production and quality are likely to disappoint.

This year exports have suffered for high cost of doing business. Now next season textile manufacturers are getting ready to counter the hazy cotton production. They had to import cotton from India and elsewhere 40 lakh bales. Very careful handling of the situation is required. Are authorities ready to face?

PM SOUGHT ACCESS TO MARKET, TECHNOLOGY:

The first ever contact between newly elected PM and nearly on the last leg US President Bush, that too on the sideline of World Economic Forum (WEF) yielded strong and vibrant promise. The promise was held back when on risking general elections with a certain message of changes, besides this many pouring message from four corners of the world that not all was good on political and economic fronts. The roaring shrieks were so horrible that countries taking pride in helping Pakistan started backing out to give the final kick to the trembling wall.

What sordid fact was that Pakistan always cherished to have strong trade ties and disdained charity like "aid". Full of potential with resources, Pakistan wanted strong and vibrant trade ties which empowers a self-respecting nation. Decidedly such negative action on the part of friends comes the desired pressure nation facing already shattered economy and elections.

The meeting outside WEF venue was no better than pre-election hints to continue as usual with long patchy link-up. What, however, persists that the PM will carry back with him the world leaders' wise sermon offered to each other. The reality is always somewhat bitter. Lets all pray to God bless him with niceties he would have cherished since he joined a political party of choice.

As things flash like stars on the firmament he must have in his heart and thousands of pious and good wishes for fellow beings he has been observing were going without two square meals, health and education. He probably knows God has provided Pakistan with potential that if wisely exploited and wealth equitably distributed make Pakistan, its economy and people as prosperous as any where on earth.

Let much claimed democracy return to this land brings with it fear of God, tolerance and respect for each other. The countries we see across the seven seas with lustful eyes, grudge abundance of smiles and dominance over weaker. The nation wants eagerly for success during first ever visit to a Muslim country where PM had meeting and opportunity to exchanges ways to lead country to a formidable position. And of course if he has not been returning with bad full of BITs and FTAs in the absence of which textile products' exports have been in lurch. The PM is aware of this and hence reminded Bush that Pakistan remains keen to intensify its relations with the US by seeking greater access to market and economy."

UKRAINE A WTO MEMBER:

Slow moving WTO towards recognition yet, has embraced Ukraine in its fold to make belief a few leftovers to hurry up. The official signing of adhesion treaty by Ukraine President Victor Yushckenko and Chief Pascal Lamy was held in February last. The members of WTO or not so far in the West found rejoicing because Ukraine happened to be a former Soviet state. Russia, despite a few attempts, has still been out, mostly on its own to stay away until ripe moments arrived.

The caution indeed is because it can move others on its own, and a keen looker how big powers are behaving. While smaller countries in search of consolidating power and distancing lonesomeness, trickle like ripe mangoes.

Those who create world organisations like the WTO, such as the EU and US weigh every word they speak and they decide to part with. After nearly six years, the nations have learnt to explore worlds hitherto unknown for more resources. Along with those prospects, for own sake feel overcome with philanthropic sentiment. While they dig and carry away raw materials from Africa, Asia and Latin America, plan how to share pleasantries with deprived ones.

But the six years have played disruptive roles transforming the original concept. In all likelihood when honey and milk flowed down the good heart of planners. There was idea of two people broadly called developed and under developed world. Since the progress in WTO continued with the decadence in a number of highly vulnerable fields such as slippage in value of dollar and rise of oil gives insight to the common man whether all are linked together to ultimately impose globalisation at the cost of lowest developed countries.

When emerging, developing countries are talked so prominently and are being separated from the rich and poor the inherent search by the rich for some excuse to install WTO at the cause of poor, if WTO is ever given room to establish itself as a body supervised and regulated by formidable, justice is being delayed for poor to deny it altogether. The ill intention shows this way is warning for emerging countries to be cautions and prepare to guard its rise that has just began.

MEALY-BUG ATTACK WAS EXPECTED:

At least couple of years back mealy-bug was sort of like terror after observation that a substantial cotton crop damage was caused by mealy bug. The attack and practically hitting cotton crop hard had made for a short while though that preparation to tackle was must, as it commanded no difficult or costly cure. The drug for facing/eliminating mealy bug had to be imported. When first it was made known as devastating some imported drug was available which shot up 10/12 times within twinkle of an eye.

A local enthusiast tightened belt to manufacture drug locally, but since then was heard nothing until the other day when the menace is threatening citrus fruits which earns name and substantial forex if all goes well until the end season and exported. The cotton crop is not essentially the topic here but how any one could stop to happen. In these lines there was repeated warning to all concerned that cotton is not the only mealy-bug food but infant crops of dozens of types are vulnerable until growth reach at certain maturity.

In a recent report only attack has been reported and damage part has been for the time being seems nil or negligible what however should take immediate steps to avoid loss but the drug available at reasonable rate. Should not agriculture departments swing in action to contribute by helping through knowledge to farmer to country the menace of mealy-bug cotton leaf curl virus or any. Immediate action is required and agri staff can do.

US cotton weekly export sales
WASHINGTON (May 24 2008): USDA cotton export sales highlights for latest reporting week. Net Upland sales of 149,000 running bales were down 35 percent from the previous week and 63 percent from the prior 4-week average.

Increases reported for China (40,800 RB), Thailand (22,700 RB), Mexico (20,200 RB), Bangladesh (16,900 RB), and Turkey (16,500 RB), were partially offset by decreases for South Korea (6,900 RB) and El Salvador (1,100 RB). Net sales of 44,500 RB for delivery in 2008/09 were primarily for Mexico (30,000 RB) and South Korea (13,300 RB). Exports of 257,000 RB were unchanged from the previous week, but up 9 percent from the prior 4-week average.

The primary destinations were China (104,000 RB), Turkey (36,800 RB), Mexico (26,500 RB), Indonesia (22,300 RB), Vietnam (15,100 RB), and South Korea (13,700 RB). Net American Pima sales of 4,300 RB resulted as increases for India (2,800 RB), Japan (700 RB), Pakistan (600 RB), and Indonesia (300 RB), were partially offset by decreases for China (100 RB). Exports of 11,900 RB were mainly to Japan (2,900 RB), Pakistan (2,100 RB), India (2,100 RB), Egypt (1,700 RB), and South Korea (1,000 RB).

Togo seeks to sharply raise cotton crop

LOME (May 24 2008): Togo aims to increase its cotton output to 80,700 tonnes in the 2008/2009 harvest from the 55,000 tonnes produced in the 2007/2008 season, the government daily Togo-Presse said on Wednesday. It said the forecast was made during a meeting last weekend between Agriculture Minister Kossi Messan Ewovor and cotton sector leaders during the official launch of the 2008/2009 season in the West African country.

The projection for 2008/2009 is more than double the record low of 39,000 tonnes produced in 2006/2007 when Togo experienced a dramatic slump from its peak output of around 180,000 tonnes. The Togolese Cotton Company (Sotoco) had originally expected the 2007/2008 harvest to reach 100,000 tonnes, but lack of rains during the sowing period has reduced it to nearly half that.

Kapas Khali NCDEX JULY
26 May 2008 8:47 am




The trend is up

The market in the last session violated and closed above the major resistance level of Rs 453.5. One can expect the market to test higher ranges of Rs 465 at least.

Enter fresh long above Rs 458 with stop loss below Rs 453

Yesterday's Close
457.80

1 day back Close
450.00

% Gains/Loss Yesterday
1.70

Trend


Daily Closing Reversal Point
444.60

Up Trend Date
8-May-08

Up Trend Price
434.40

Current Gain/Loss
23.40

% Gains/Loss
5.39%

Open Interest
51850.00

Previous Days
50070.00

% Increase/Decrease in OI
3.43

Highest Open Interest of Contract
51850.00

Volumes
36120

Previous Days Volume
21230

% Increase/Decrease in Volumes
41.22

Highest Volume of the Contract
36340.00


INTRA-DAY LEVELS

Last Close
Daily Closing Reversal

Point
Level 1
Level 2
Center Point
Level 3
Level 4

457.8
444.6
444.6
451.2
454.6
481.2
464.6

Cotton lint subdued in North India
26 May 2008 4:19 pm

Abohar – After gained in previous day, Spot cotton lint declined by Rs. 10-25 per quintal on lack of demand from millers at higher level in major markets of North India. Local millers want to purchased more goods but they are waiting for new deals.

Across Punjab, cotton lint traded at Rs 2,625/maund at Fazilka, Kotakpura, Muktasar and Bathinda; Rs 2,625/maund at Malot and Gidarbha; Rs 2,625/maund at Abohar; Rs 2,605-2,610/maund at Manasa; and at Rs 2,635-2,640/maund at Rampura, Barnala and Budhaldha.

Cotton lint traded at Rs 2,515-Rs 2,555/maund in Haryana and at Rs 2,400-Rs 2,450/maund in Rajasthan

Solo deal struck at Rs 3,950 in firm trend on cotton market

KARACHI (May 27 2008): Dullness prevailed on the cotton market on Monday as buyers were conspicuous by their absence, apparently because of higher trend in the prices, experts said. The Karachi Cotton Association (KCA) official spot rate was inert at Rs 3600, dealers said.

According to the market sources, a number of buyers were interested in fresh deals but they preferred to stay on sidelines due to upward trend. In the meantime, timely rain in the cotton growing areas may help in achieving the target for the new season, which is likely to stabilise the prices in the local market, they said.

But it is expected that the fine type prices my go up sharply as exporters are likely to take interest in preparation of contamination-free products to win competitive world markets, they added. A deal of 1000 bales from Harapa was reported at Rs 3950, they 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 3600.00 50 3650.00
-----------------------------------------------------------
Equivalent
-----------------------------------------------------------
40 Kgs 3858.00 50 3908.00
================================================== =========

India
Spun Yarn Prices in India (Monthly Report)

26 May 2008 - Spun yarn prices are mixed in India this month with cotton yarn prices staying boosted 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

China Cotton Index (1:55 GMT 27th May, 2008)
ZCE slides (9:17 GMT 26th May, 2008)
Egyptian market news (7:55 GMT 26th May, 2008)
CNCE firmly (3:31 GMT 26th May, 2008)
China’s Keqiao Textile Index falls slightly (3:25 GMT 26th May, 2008)
China Cotton Index (2:46 GMT 26th May, 2008)
No Grower business on The Seam (21:04 GMT 23rd May, 2008)
No. 2 cotton futures settle moderately lower (19:55 GMT 23rd May, 2008)
ACSA 84th Annual Meeting (19:16 GMT 23rd May, 2008)
Speculative selling driving No. 2 cotton futures lower (16:59 GMT 23rd May, 2008)
Cooler-than-desired temperatures prevail in Far Western US (16:27 GMT 23rd May, 2008)

South China to see more rains (8:15 GMT 27th May, 2008)
ZCE recovers slightly (8:15 GMT 27th May, 2008)
Southwest monsoon landfall predicted soon in India (8:04 GMT 27th May, 2008)
CNCE firmer (3:37 GMT 27th May, 2008)
China Cotton Index (1:55 GMT 27th May, 2008)