Cotton

14.11 million bales cotton production likely this year

MULTAN (May 28 2008): It is hoped that 14.11 million bales of cotton will be produced this year while the sowing area target has been fixed at 3.2 million hectares (7.904 million acres). The target has been set by the Crop Assessment Committee in its recent meeting, said Director, Central Cotton Research Institute (CCRI), Muhammad Arshad, while talking to APP.

He said that cotton sowing "is at its peak currently", and cultivation would continue till the first week of June. The province-wise sowing targets are: Punjab 2.52 million hectares (6.224 million acres); Sindh 0.63 million hectares (1.556 million acres), NWFP 0.01 million hectares (0.024 million acres), and Balochistan 0.04 million hectares (0.98 million acres).

The province-wise production target has been set as follows: Punjab 11 million bales, Sindh 3 million bales, NWFP 0.01 million bales and Balochistan 0.1 million bales. Experts observed that cotton sown two weeks ago or more would not be affected by rains, but the recently sown fields would have to be re-sown because the cotton seed cannot germinate and grow in the rain-wet fields.

Last year, the government had to downward revise the cotton output target twice due to water shortage and massive attack of mealy bug and at some places the attack of virus. According to Multan Chamber of Commerce and Industry (MCCI) president Jalaluddin Roomi, the country's approximately 400 textile mills consume about 16 million bales cotton per annum. The shortfall has to be met by importing cotton by spending huge amounts of forex.

About cultivation of Bt cotton, CCRI Director said that two institutes--Nuclear Institute of Biotechnology and Genetic Engineering (Nibge) Faisalabad, and Centre of Excellence of Microbiology (Cemb) Lahore--are working to develop local Bt cotton. "Farmers are utilising the imported cotton seed but it is not sure whether it is Bt seed or not. If the crop is attacked by American bollworm, spotted bollworm or pink bollworm, then it means the seed is not of Bt variety."

He said that even Bt seed is not immune from the onslaught of mealy bug, which disappointed the cotton growers and many of them are now compelled to divert to other crops, such as vegetables, paddy, maize, sugarcane, etc.

President of Farmers Organisation for Progress (FOP), Mushtaq Ahmed, and general secretary Mahtab Hussain called for steps to save the cotton crop from mealy bug devastation, which adversely hits the produce and the textiles of the country.

Cotton lint trades up in north India

27 May 2008 6:10 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 2,650-Rs 2,660/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 2,675/maund at Rampura, Barnala and Budhaldha.

Cotton lint traded at Rs 2,515-Rs 2,565/maund in Haryana and at Rs 2,420-Rs 2,490/maund in Rajasthan

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Spot cotton lint marches ahead
27 May 2008 3:36 pm

Mumbai - Spot cotton lint prices moved up further Monday as millers are buying hastily looking at the condensing arrivals at the markets across western India.
At Kadi in Gujarat, cotton lint S-6 A-grade was quoted between Rs 24,500-Rs 25,000/candy while average-grade traded at Rs 23,800-Rs 24,300/candy. Kapas got offered at Rs 550-Rs 640/maund. Around 9,000 bales of cotton arrived in the State today.

In Vidarbha region of Maharashtra, the 28-mm cotton lint traded at Rs 23,500-Rs 23,900/candy; 29-mm cotton lint traded at Rs 24,300-Rs 24,700/candy. Around 4,000 bales arrived in the State today.

New York cotton futures plummet

NEW YORK (May 28 2008): Cotton futures crumbled from investor fund sales to finish sharply lower on Tuesday and fibre contracts may sink further on follow-through pressure in the days ahead, brokers said. The market was shut Monday for a holiday.

The benchmark July cotton contract sank 2.96 cents to end at 66.25 cents per lb, trading from 66.21 to 69.65 cents. It was the lowest close for cotton on a spot basis since late December.

The new-crop December cotton contract lost 3.00 cents to finish at the session low of 75.01 cents, with the day's high at 78.44 cents. "From a technical standpoint, it's a disaster," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.

He said follow-through investment sales from the end of last week spilled into Tuesday's business. Combined with weakness in other commodity markets, the fall in fibre contracts accelerated in the close of trade.

Traders said the break should spur trade and consumer buying at the lows, but there appears to be no sign so far that that is taking place. "You could have a situation where those doing fixation buying may back off while they're waiting for prices to come off further," one said. Fundamentally, the market is keeping an eye on the developing crop in places like Texas, the area which may produce up to half of the cotton crop in the United States in the 2008/09 marketing year (August/July).

Forecasters DTN Meteorlogix said Texas should see some light showers through Wednesday, and then turn drier Thursday to Saturday. There was also some switch dealings being done as investors moved positions out of July and into the new-crop December cotton contract.

Analysts said market participants who use price points to make trading decisions pegged support in the July cotton contract at 66 cents with resistance around 67.50 cents. Volume traded Friday in the cotton market hit 29,928 lots, exchange data showed. Open interest in the cotton market fell 1,604 lots to 267,224 lots as of May 23, it said.

Some Chinese mills receive additional quotas (8:26 GMT 28th May, 2008)
ZCE slides (8:16 GMT 28th May, 2008)
Indian monsoon continues on track (7:56 GMT 28th May, 2008)
New York speculators reduce long position (7:48 GMT 28th May, 2008)
CNCE moves lower (3:38 GMT 28th May, 2008)
China Cotton Index (2:01 GMT 28th May, 2008)
China’s long staple cotton prices rise modestly (1:33 GMT 28th May, 2008)
Sales slow on The Seam (21:34 GMT 27th May, 2008)
ICE cotton near limit down on settlement (19:22 GMT 27th May, 2008)
ICE cotton futures trading sharply lower (16:31 GMT 27th May, 2008)
Stormy weather persists in Southern US (14:58 GMT 2

Cotton lint trades weak in north India

28 May 2008 4:10 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 2,640-Rs 2,650/maund at Fazilka, Kotakpura, Muktasar and Bathinda; Rs 2,625-Rs 2,635/maund at Malot and Gidarbha; Rs 2,625/maund at Abohar; Rs 2,615/maund at Manasa; and at Rs 2,655-Rs 2,665/maund at Rampura, Barnala and Budhaldha.

Cotton lint traded at Rs 2,505-Rs 2,555/maund in Haryana and at Rs 2,420-Rs 2,490/maund in Rajasthan

Spot cotton lint marches down
28 May 2008 3:36 pm

Mumbai - Spot cotton lint prices moved up further Monday as millers are buying hastily looking at the condensing arrivals at the markets across western India.
At Kadi in Gujarat, cotton lint S-6 A-grade was quoted between Rs 24,500-Rs 24,800/candy while average-grade traded at Rs 23,600-Rs 24,200/candy. Kapas got offered at Rs 550-Rs 640/maund. Around 9,000 bales of cotton arrived in the State today.

In Vidarbha region of Maharashtra, the 28-mm cotton lint traded at Rs 23,400-Rs 23,800/candy; 29-mm cotton lint traded at Rs 24,200-Rs 24,500/candy. Around 4,000 bales arrived in the State today.

High prices, fine lint shortage cause cotton market dullness

KARACHI (May 29 2008): Soaring prices and acute shortage of fine quality kept the buyers confused on the cotton market on Wednesday, experts said. The Karachi cotton Association (KCA) official spot rate was higher by 50 at Rs 3650. Just two deals finalised at the peak level at Rs 4000, they noted.

Several buyers were on the sidelines as they have already bought or some are hoping that price may come down to make new deals, they said. Those, who have imported enough to meet the import commitments, were looking a little bit worried about the variety as quality is not matching with the export parity levels, they said.

This factor may cause falling trend in the textiles if mills' are not able to compete the world market, they said. In the meantime, the ginners, who have good quality of cotton, were not prepared to sell at the present level, instead, they were waiting for further rise in the prices to fetch higher profit, they said.

On Tuesday, the cotton futures crumbled from investor fund sales to finish sharply lower and fibre contracts may sink further on follow-through pressure in the days ahead, brokers said. The market was shut Monday for a holiday.

The benchmark July cotton contract sank 2.96 cents to end at 66.25 cents per lb, trading from 66.21 to 69.65 cents. It was the lowest close for cotton on a spot basis since late December. The new-crop December cotton contract lost 3.00 cents to finish at the session low of 75.01 cents, with the day's high at 78.44 cents. The following deals were struck : 400 bales from upper Sindh sold at Rs 4000 and same figure from Harappa at the same level, they said.

================================================== =========
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
================================================== =========
Rate Ex-Gin Upcountry Spot Rate Ex-Karachi
for Price Sales Tax @ 15%
================================================== =========
37.32 Kgs 3,650.00 50 3,700.00
Equivalent-------------------------------------------------
40 Kgs 3,912.00 50 3,962.00
================================================== =========

New York cotton futures end mixed

NEW YORK (May 29 2008): Cotton futures closed mixed Wednesday as trade and suspected consumer buying wiped out most of the early losses from investor sales, with brokers saying the market may see some consolidation in the days ahead.

The benchmark July cotton contract rose 0.24 cent to end at 66.49 cents per lb, trading from 65.11 to 67.20 cents. New-crop December shed 0.07 cent to finish at 74.94 cents, ranging from 73.79 to 75.50 cents.

Volume in the July contract stood at 13,731 lots at 3:03 p.m. EDT (1903 GMT), while December volume was 8,790 lots. "There is a very good chance that cotton prices have now reached a near-term bottom, supported by demand, and will begin a consolidation phase," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.

He added that "fresh demand along with fixations began to pick up yesterday. (They) were evident again overnight as well as on the break this morning." On a fundamental level, the market is monitoring development of the cotton crop for the 2008/09 marketing year (August/July).

Forecaster DTN Meteorlogix said the key growing area of Texas should get light showers through Sunday. Market sources said there were numerous reports of hail in Texas, which will likely produce about half of all US cotton, along with beneficial rains soaking the ground near the end of the spring planting season.

In other news, China said it will reduce tariffs on cotton imported in excess of annual quotas to ease prices for the domestic and clothing industry. Dealers said the move may help spur some buying by China, the world's top consumer of cotton and a major importer of fiber from the United States. Brokers Flanagan Trading Corp sees support in the July cotton contract at 66.40 and 65.75 cents, with resistance at 67.50 and 68.30 cents.

Volume traded Tuesday in the cotton market hit 33,593 lots, exchange data showed. Open interest in the cotton market rose 1,519 lots to 268,743 lots as of May 27, it said.

DJ USDA Attache:China"s 08-09 Cotton Imports Est At 3.7 Mln Tons
29 May 2008 3:42 am

China"s cotton imports are forecast at 3.7 million metric tons in marketing year 2008/09, up from an estimated 2.7 MMT in 2007/08, according to a U.S. Department of Agriculture attache report posted Wednesday on the Foreign Agricultural Services Web site.

This import increase is based on expected growth of cotton use and a slight decline in domestic production due to a reduction in the planted area in response to higher returns from grain crops. Cotton consumption is forecast at 11.8 MMT in MY08/09, up five percent from the previous year. This relatively low growth is attributed to a combination of factors, mainly the appreciation of the Chinese currency, that are limiting growth in the textile sector. The supply and demand gap continues to expand and is unlikely to be met by domestic production, thus cotton exports to China will remain strong in the foreseeable future. In MY08/09, the United States will continue to face fierce competition from India, which will likely expand its market share in China.

Executive Summary
China"s cotton imports are forecast at 3.7 MMT in MY08/09, one MMT higher than the estimated 2.7 MMT in MY07/08. The increase to the import forecast is mainly attributable to a slightly smaller domestic production of 7.7 MMT (compared to the 7.8 MMT in the previous year) and expected growth in consumption. Due to anticipated higher returns from grain crops, the domestic cotton planted area in MY08/09 is forecast at 5.8 million hectares (MHa), slightly down from the 5.9 MHa in the previous year. The Government of China (GOC)"s policy continually favors grain crops because of the limited availability of arable land.

Cotton consumption in MY08/09 is forecast at 11.8 MMT, up five percent over the previous year, while the consumption growth in MY07/08 is estimated at four percent. The low yearly growth rate is the result of a combination of factors that have been adversely impacting China"s textile industry since 2007. These factors include the additional appreciation of the Chinese currency and reduced export tax rebate, increased production costs (labor and inputs), and a tight credit policy are expected to further squeeze profit margins of the sector in MY08/09. However, China"s cotton demand is expected to continue growing in the near future. Cotton use is expected to be driven by China"s massive textile industry (with an estimated 100 million spindles), the growing domestic demand for textile/apparel products, and the growing exports subject to readjustment of product mix.

Because the supply and demand gap is expected to continue to expand and is unlikely to be met by domestic production, cotton exports to China will remain strong in the foreseeable future. In the interest of protecting cotton farmers and supporting the development of the textile industry, the GOC is expected to maintain the current trade policy on cotton imports, including the Tariff Rate Quota (TRQ) and the variable tariff rate regime, and to continue to regulate the domestic supply and demand through the purchasing and sale of a state cotton reserve.

The lack of an official balance sheet for China"s cotton market remains unchanged. However, the results of China"s 2nd National Agriculture Census (2nd Ag Census) and the on-going cotton classification reform are likely to facilitate adjustments to domestic production estimates.

Production
China"s cotton production for MY08/09 is forecast at 7.7 MMT, down from an estimated 7.8 MT from MY07/08. This decrease is based on a slightly smaller planted area with yields remaining similar to the previous year. China"s cotton planted area increased in 2006 and remained stable in 2007 mainly due to comparative revenue versus other crops (The area estimate/forecast in this report is adjusted in line with the 2nd Ag Census results). However, in response to skyrocketing prices for competing grain and oilseed crops in some cotton-producing regions in 2006 and early 2007, the cotton planted area in some provinces is expected to decline slightly (See Table 15 for planted area and production by province). The GOC"s 2008 policies also favor grain crops for grain security and to safeguard against the sudden increase in grain prices. Though forecasts made by various national and provincial government agencies are not in agreement, considering all sources, Post favors the notion that the total cotton area is likely to decline slightly. Below are some of the influential conclusions published by some of the most prominent organizations in China"s cotton production, research, and analysis.

Planted area
Based on the planting intention survey conducted in January 2008, the China Cotton Research Institute (CRI) forecast planting intentions for MY08/09 will decline by one percent. CRI conducts annual cotton planting intention surveys on fixed households. The current survey covered 3,956 cotton producing households in the 136 leading cotton-producing counties nationwide. The survey also indicates that most of the interviewed farms will maintain a similar cotton area versus the previous year in the three major cotton-producing regions (see the following table). The survey also indicates that the national average seed cotton price from September 2007 to January 2008 is 20 percent higher than the previous year. The majority (87 percent) of surveyed farmers in the Northwest Region reported unchanged planting intentions in MY08/09, while the same survey results for the non-Northwest regions was 60 percent. CRI argued that a stable planting intention for most of China"s cotton farmers is attributable to the increase in seed cotton prices in 2007, while the total area decline is in response to an anticipated higher purchasing price for grain and oilseeds based on skyrocketing prices for grain and oilseed products and increased subsidies for grain and oilseed crops.

In Mid-March 2008, the China Cotton Association (CCA) released the MY08/09 cotton planting intention survey conducted in February 2008. It showed a two-percent increase based on results from 1,911 cotton farmers in 13 cotton-producing provinces. The planting intention is generally stable in the Northwest Region, but increases are expected in the eastern and central provinces including Hubei and Anhui, and a decline anticipated in Jiangsu Province. Relatively high cotton prices and returns in 2007 have given farmers confidence in planting cotton. Post"s joint field study with CCA in Hebei Province and Tianjin Municipality showed a stable to declining cotton planting intention. The farmers interviewed in Hebei reported smaller cotton planted area as compared with the previous year. Farmers complained that soaring prices for agriculture inputs and higher labor inputs for cotton planting due to increased outbreak of cotton diseases have resulted in lower profit margins as compared to grain and oilseed crops.

The largest producer, Xinjiang province, will maintain a stable planted area as the 'unchanged' planting intentions are partly due to the lack of alternative crops. According to the Xinjiang Statistics Bureau, the 2007 planted area was 1,380 thousand hectares (this is not adjusted according to the 2nd Ag Census). Cotton contributed US$ 37 (RMB260) out of the total US$57 (RMB400) income growth for farmers in 2007. Post"s field study also showed Xinjiang"s MY08/09 cotton area is likely to remain the same as the previous year.

China"s Ministry of Agriculture (MOA) has not released the cotton planting intention survey results, however, they have set the target area at 5,533 thousand hectares (83 million Mu) for MY08/09 (Note: this area estimate is not adjusted according to the 2nd Ag Census results). MOA stres