Cotton

Spot cotton lint marches down
29 May 2008 4:30 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 24,300-Rs 24,700/candy while average-grade traded at Rs 23,400-Rs 24,000/candy. Kapas got offered at Rs 550-Rs 640/maund. Around 8,000 bales of cotton arrived in the State today.

In Vidarbha region of Maharashtra, the 28-mm cotton lint traded at Rs 23,200-Rs 23,600/candy; 29-mm cotton lint traded at Rs 24,100-Rs 24,400/candy. Around 4,000 bales arrived in the State today.

Microsoft not keen to merge: *****

California, May 29: Chief Executive Jerry Yang said on Wednesday a potential deal with Microsoft has tremendous power, but the software giant appears no longer interested in a full merger.

In his most public comments to date about his thinking on the four-month-old, on-again, off-again Microsoft merger saga, Yang signaled his company remained open to a potential deal, but said Microsoft had ruled out a merger for now.

Earlier this month, Microsoft walked away from a proposal to acquire ***** for $47.5 billion, or $33 per share, after ***** rebuffed its offer, saying it would only settle for $37 a share.

"We did not walk away from that proposal. Microsoft did," Yang said during an on-stage interview at the D: All Things Digital conference taking place near San Diego on Wednesday. He said he had felt a combination with Microsoft would have had a "tremendous amount of power."

In mid-May the two companies said they had begun discussions on an unspecified deal that is short of a merger. "Microsoft is no longer interested in buying the company, and we are talking about other things. We definitely have to understand what they're proposing...they clearly have an interest in *****, and we need to understand more," Yang said.

Last week, a source familiar with the latest round of discussions said Microsoft has proposed buying *****'s search business and taking a minority stake in the Web pioneer, but has stopped stopping short of reinitiating full merger negotiations.

As part of such a deal, ***** would sell its Asian assets including significant minority stakes in ***** Japan and China's Alibaba Group, while Microsoft would buy a chunk of what remains of the company, the source said.

In an on-stage interview at the "D" conference on Tuesday, Microsoft Chief Executive Steve Ballmer suggested discussions had broken down largely over price. "It became clear there was a difference between the bid and ask," he said, using stock trader terms.

In its original unsolicited takeover offer in late January, Microsoft offered $31 a share in a half-cash, half-stock bid, to buy *****, which valued it at $44.6 billion. ***** responded by saying it was open to a deal but the offer was too low.

Ballmer repeated on Tuesday that Microsoft had "moved on" but stopped short of saying the mating dance between Microsoft and ***** was over. "We are not re-bidding for the company," he said, but added: "We reserve the right to do so."

In the Wednesday interview conducted by Wall Street Journal technology columnist Walt Mossberg, Yang said a merger with Microsoft would involve a variety of issues beyond price. He said discussions between the two had never thoroughly explored such non-price hurdles, including regulatory issues.

***** President Susan Decker, appearing alongside Yang on stage, said price had always been the biggest barrier to reaching agreement on a deal with Microsoft. "We never got through the price door ... once we could have gone through it, then other issues could have been discussed."

Yang argued a competing deal between ***** and Google made sense but no deal had been reached.

No parity between cotton and yarn prices, says SIMA

Coimbatore, May 29: The increase in the prices of cotton has paralysed the textile industry and even the top mills are incurring huge losses, according to the apex body of South Indian Textile Mills here.

The predominantly cotton-based Indian textile industry had been performing extremely well during the period 2003-2007, mainly due to adequate availability of good quality of home grown cotton, sources in the Southern India Mills' Association (SIMA), said.

To prove their point, the sources said that Shankar-6, a major cotton variety grown in Gujarat and normally used for producing 40s yarn, was priced at around Rs 19,000 per candy during the years 2006 and 2007. But it was sold at Rs 23,500 per candy now, an increase of 24 per cent, they said.

However the average yarn price per bundle of 4.54 kg of 40s hank yarn was Rs 568 during the year 2006 and Rs 558 during 2007, whereas, it was sold at only Rs 553 today, a decrease of one per cent, when compared to 2007 average price.

Similarly J-34 coton normally used for producing 20s yarn, which was sold at an average prices of Rs 16,500 per candy during 2006 and Rs 18,000 per candy during 2007, now was sold at Rs 20,500 per candy, an increase of 14 per cent, they said.

Cotton prices tightly held at record levels

LAHORE (May 30 2008): Cotton prices continued their advance this week and remained firm on Thursday even if the reported volume of business remained low. Traders said that ginners still hold more or less 200,000 (Two hundred thousand) bales of unsold cotton with them from the current crop (2007-2008).

While these may be sold out soon, early varieties from the next crop (2008-2009) may start arriving by the next month from certain areas in Pakistan like Sahiwal, Pakpattan, Faisalabad, Okara or Chichawatni.

Within the last two months time, ex-gin price determined by the Karachi Cotton Assoication (KCA) for grade 3 cotton has risen from Rs 3,300 per maund (37.32 kgs) prevailing on the first of April, 2008 to Rs 3,700 per maund on Thursday (29th May, 2008), a whopping increase of Rs 400 per maund.

According to cotton consultant Nasim Usman, lint prices which were prevailing around Rs 2,500 per maund (37.32 kgs) last year (2006-2007) are today obtaining anywhere from Rs 3,800 to Rs 4,000 per maund, according to the quality. This denotes an increase in lint price by more than fifty percent compared to the previous season (2006-2007).

Nasim Usman added that cotton imports into Pakistan from August 2007 to April 2008 (nine months period) are being reported at 3,935,000 bales (170 kgs) compared to about 2,100,000 bales for the same period last season (August 2006 to April 2007) which shows an increase in cotton imports by nearly fifty percent. It is anticipated that about 200,000 to 300,000 more bales are likely to be imported between now and the end of July, 2008 when the current cotton season (2007-2008) ends. About half the quantity of cotton imports this year have been from India. This trend definitely denotes that despite the despair and despondency of the Pakistani textile industry, cotton consumption continued its upward drive.

The textile mills and its ancillary sub-sectors continue to proclaim their disillusionment with the current state of affairs prevailing in the industry. Amongst its complaints, the industry continues to cite high cost of doing business, untenable increase in bank mark-ups following recent decision of the State Bank of Pakistan (SBP) to increase the discount rate by 1.5 percent, the erratic and short supply of electricity and increase in its tariff, and also fears that any decrease in research and development (R&D) assistance or prevailing fiscal and other compensations could cripple their industry.

Increases in yarn and fabric prices have occurred for many counts of yarns and constructions of fabrics, which at least provide some relief to the textile industry. It is hoped that the government and the textile industry would find some via media to work together in order to provide the necessary fillip to this premier and basic industry of Pakistan. Exemption of 35 percent margin on cotton imports should provide some help to the textile industry.

Welcome news coming from the cotton fields is that overall sowing in the cotton belt both in Sindh and Punjab has been good and is progressing satisfactorily. In fact, the earlier fears of shortage of irrigation water have been considerably alleviated due to recent rains and melting of snows in the northern areas.

Widespread though sporadic rains in several parts of the cotton belt are cumulatively being construed to be good, though some resowing has been reported here and there and also some initial presence of the dreaded mealy bug in a few areas. Sowings have also started in upper Sindh (k-68) and lower Punjab areas like Rahimyar Khan. The official target figure of cotton output for the forthcoming season (2008-2009) remains 14.10 million bales.

Other drawbacks reported to be troubling the forthcoming cotton crop (2008-2009) include high price of di-ammomium phosphates (DAP) and other inputs, reports of supply of inferior, defective and spurious cottonseeds, but overall the growers are very enthusiastically planting and looking after their forthcoming crop (2008-2009) as they have been justifiably rewarded by the handsome increase in cotton prices.

If price of the lower grades of cotton from the current crop (2007-2008) are included, then the price of lint was being quoted anywhere from Rs 3,700 to Rs 4,000 per maund (37.32 kgs) on Thursday in both Sindh and Punjab. The new price structure of the cotton economy of Pakistan incorporates increase of prices of raw cotton and textile products to a sizeable degree in terms of Pakistani rupee which has lost its value by rupees eight to rupees ten against the United States dollar since the end of last year (end of December, 2007) till now.

According to textile selling agency Messrs Gold Mohur Corporation in Karachi, the local prices of cotton yarns have gone up by twenty five to thirty percent, while the prices of fabrics of different varieties have gone up by thirty five to forty five percent compared to the rupee prices prevailing last year.

The federal budget is scheduled to be announced on the seventh of June, 2008 which should address a plethora of issues to remedy and rectify the faltering Pakistan economy.

A sale of 400 bales of lower grade cotton from Mehrabpur in Sindh was reported at Rs 3,600 per maund (37.32 kgs), while 2,400 bales of relatively below average cotton from Shujabad in Punjab were sold at Rs 3,740 per maund. The overall impression of the price situation in the evening was reported to be stable and steady.

Spot rate raised by Rs 50 at Rs 3700 on cotton market

KARACHI (May 30 2008): Spot rate was further higher on the cotton market on Thursday despite the fact that there was no rush by the mills, experts said. The Karachi Cotton Association (KCA) raised official spot rate by another Rs 50 second in succession, at Rs 3700, dealers said.

According to the market sources, the ginners were demanding higher prices for the fine type, otherwise, there is no panic on the part of spinners, but soaring prices are really a surprising factor. They also said that the mills were trying to lower the prices but the ginners were not ready to bring the rates down due to rising trend in the oil and dollar rates.

On Wednesday, cotton futures closed mixed 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 pm EDT (1903 GMT), while December volume was 8,790 lots. A solo deal of 7100 bales of cotton from upper Sindh was recorded at Rs 3800-3825, 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 3,700.00 50 3,750.00
Equivalent-------------------------------------------------
40 Kgs 3,965.00 50 4,015.00
================================================== =========

China cotton imports may rise
WASHINGTON (May 30 2008): China's cotton imports in 2008/09 are forecast to rise to 3.7 million tonnes from 2.7 million tonnes a year ago due to higher demand and a shift in land going from cotton to grain crops, a US Agriculture Department attache in Beijing said on Wednesday.

The increase in imports is the result of a smaller domestic crop of 7.7 million tonnes compared with 7.8 million tonnes in 2007/08. The report also said cotton consumption is forecast at 11.8 million tonnes in 2008/09, up 5 percent from the previous year's 11.2 million tonnes.

The United States will remain the largest exporter to China due to its quality and reliability, but cheaper prices and convenient delivery will make Indian cotton a fierce competitor. As of March, total imported volume from India reached 560,000 tonnes (35 percent), approaching the 633,000 tonnes from the United States (40 percent).

New York cotton futures settle easier

NEW YORK (May 30 2008): Cotton futures ended easier on Thursday on investment fund sales inspired in part by weak commodity markets, but trade and consumer buying pared the losses in fibre contracts, brokers said.

The benchmark July cotton contract fell 0.50 cent to end at 65.99 cents per lb, trading from 65.76 to 66.65 cents. It was an inside day since it was within Wednesday's 65.11 to 67.20 cents band.

The new-crop December cotton contract shed 0.30 cent to finish at 74.64 cents, ranging from 74.09 to 75.07 cents. The contract was also within the Wednesday trading band of 73.79 to 75.50 cents.

Volume in the July contract stood at 12,205 lots at 3:00 pm EDT (1900 GMT) while December volume was at 9,123 lots. "It's not giving up much here," said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia. She said the ability of cotton to minimise its losses was a bit encouraging, but the next move in the market was hard to forecast given the volatility seen in cotton and other commodity markets these days.

Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said a close in the July contract above 67.20 cents "should trigger a quick test of 68.43 cents" which is a "50 percent correction from last Thursday's high to yesterday's low."

In the December cotton contract, Stevens said a settlement over 75.50 cents should spark "a quick test of 77.15 cents." Separately, brokers said they expect the US Agriculture Department's weekly export sales report to show total US cotton sales anywhere from 200,000 to 220,000 running bales (RBs, 500-lbs each), against sales in last week's report of 197,800 RBs.

US cotton shipments of previously booked orders are seen hitting from 250,000 to 300,000 RBs, versus shipments in last week's USDA data of 268,900 RBs. On a fundamental level, the market is monitoring development of the cotton crop for the 2008/09 marketing year (August/July). Forecasters DTN Meteorlogix said key growing area of Texas should be mostly dry through the weekend and into Monday.

Brokers Flanagan Trading Corp sees support in the July cotton contract at 65.75 and 65 cents, with resistance at 66.40 and 67.50 cents. Volume traded Wednesday in the cotton market hit 24,643 lots, exchange data showed. Open interest in the cotton market rose 703 lots to 269,446 lots as of May 28, it said

Pakistan
Polyester Fibre and Yarn Prices in Pakistan (Monthly Report)
28 May 2008 - Polyester staple fiber prices further rose in the past weeks in Pakistan, in line with a similar increase in cotton prices. PSF prices are now 21-25% above their level a year ago. Prices of blended yarns of polyester-cotton were also raised although less significantly, our Pakistan Correpondent reports
India
Spun Yarn Prices in India (Monthly Report)
22 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.
China
Spun Yarn Prices in China (Biweekly Report)
26 May 2008 - Spun yarn prices were mixed in the past two weeks in China with cotton yarns staying unchanged while polyester yarns were slightly declining and viscose yarns were more significantly falling. China's yarn production strongly rose in April but clearly slowed down since the start of the year. Fabric production is much more affected as clothing exports are weakening with producers shifting from volume-based to value-based strategies.
Cotton Prices
Cotton Prices Heavy Falling on International Market (Mid-Week Update)
29 May 2008 - Cotton prices sharply declined on Tuesday in New York, reflecting a lack of interest from financial funds. The fall triggered some strong buying from spinners. China decided cutting import tariffs, in addition, in order to reduce the cost of fine lint cotton for its textile industry. Prices reached in a new historical record in Pakistan

WORLD COTTON STATISTICS AS PER APRIL 10, 2008

WORLD COTTON UTILIZATION
(in million bales of 480 lbs.)


2004/05 2005/06 2006/07 2007/08 2008/09
Beginning stocks 44.5 58.0 60.0 57.0 54.5
Production 122.0 118.0 120.5 118.0 118.5
Consumption 108.5 116.0 123.5 120.5 119.0
Ending stocks 58.0 60.0 57.0 54.5 54.0
Ending stocks
Months of Consumption 6.4 6.2 5.5 5.4 5.4
China's Ending Stocks 15.4 19.8 13.4 11.2 12.1
World Less China 42.6 40.2 43.6 43.3 41.9


WORLD TOP 5 PRODUCING COUNTRIES
(in million bales of 480 lbs.)

2004/05 2005/06 2006/07 2007/08 2008/09

China 31.3 30.1 34.5 35.0 35.0
India 19.0 19.1 22.0 24.2 26.1
United States 23.3 23.9 21.6 19.4 15.0
Pakistan 11.1 10.2 9.8 8.8 9.6
Brazil 5.9 4.7 7.0 7.3 7.3


WORLD TOP 5 CONSUMING COUNTRIES
(in million bales of 480 lbs.)
(est.) (proj.)
2004/05 2005/06 2006/07 2007/08 2008/09

China 38.5 45.0 51.5 49.2 47.8
India 14.8 16.7 18.3 19.1 20.0
Pakistan 10.5 11.5 12.3 11.8 11.5
United States 6.7 5.9 4.9 4.7 4.5
Brazil 4.3 4.4 4.3 4.5 4.3

New York Close (vs. previous week)
Jly08 65.74 -347 Mch08 80.03 -348
Oct08 71.16 -335 May09 81.67 -314
Dec08 74.37 -364 Jly09 82.57 -339
.................................................. .............
Cotlook A Index (FE)
2007/08 72.75 -235
2008/09 80.25 -
U.S. Exports Net Sales
Accumulative 13,848,200
Weekly 110,700
China 29,100
Thailand 13,100
Turkey 9,800
Wkly Shipments 270,500
CCC Loan Outstanding
7,543,940 -173,660
NYK Open Interest
269,733 +905
Net Speculators’ Position
Long 7.1% -3.9%
NYK Certificated Stocks
1,547,064 +28,981
Awaiting review 59,907