Cotton output to fall & consumption to riseDecember 17, 2010 (India)

The Chairman of The Southern India Mills’ Association, (SIMA), Mr. J. Thulasidharan while addressing the audience at the 6th edition of Texfair-2010 in Coimbatore on December 17th estimated that due to unseasonal monsoon and floods in the cotton growing states of Andhra Pradesh, Maharashtra and some parts of Gujarat, cotton production for the 2010-11 season will be about 290 lakh bales (29 million bales of 170 kg each). 

This is 35 lakh bales (3.5 million bales) less than the Indian Cotton Advisory Board’s estimate of 325 lakh bales (32.5 million bales). The Southern India Mills’ Association in Coimbatore, India is a 400 member body representing the spinning industry with majority of its members in the southern states of India

While the new estimate by SIMA is 29 million bales, the closing stock for the season ending in September 2011 is estimated to be 34.5 lakh bales (3.45 million bales). The cotton production is predicted to go down and the domestic cotton consumption is expected to go up. 

There will be one million spindles added during April 2011- March 2012. During April 2009- March 2010, 3.5 million spindles were added. New spindles added over the two year period (April 2010-March 2012) will be 4.5 million. While speaking to this scribe in the sideline of Texfair event in Coimbatore, the additional spinning capacity numbers were also echoed by an executive of Rieter India Pvt. Ltd, one of the three leading spinning machinery suppliers in India. 

According to this industry person, the investment capacity of the spinning mills is limited due to the existing machinery manufacturers’ production capacity. He further added, the spinning mills will be interested in adding more spindles if the machinery producers can supply more. The investments by Indian spinners will lead to increased domestic cotton consumption in the next year and further, which may lead to cotton supply squeeze.

By: Seshadri Ramkumar, Texas Tech University, USA

 

Source: http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=94083

 

DGFT to again authorise cotton exports; revised rules coming

Dilip Kumar Jha / Mumbai December 18, 2010, 0:19 IST

The Directorate General of Foreign Trade (DGFT) has taken back the power for registration, inspection and clearance of cotton exports from the Textile Commissioner under the textile ministry. DGFT works under the commerce ministry.

DGFT registers, inspects and certifies shipments. The process is mandatory for all exports. DGFT had transferred this authority for cotton to the Textile Commissioner in August this year.

“We do not have any comment to offer,” said Textile Commissioner A B Joshi. DGFT is learnt to be in the process of issuing revised guidelines for cotton exports on Monday, with two changes from the rules issued by the Textile Commissioner.

First, DGFT may allow exports strictly under letter of credit (LC) from banks, equal to the value of the export. On Friday, a trader can export in multiples of the quantity of LC from banks. Second, DGFT may reduce the period between registration and shipment from 45 days to 30 days. These were the demands of the textile industry, said a senior official of a garment export house.

With bumper cotton production on the cards, the government is considering raising the year’s export ceiling to nine million bales (a bale is 170 kg) from 5.5 million bales. This has been a demand of cotton growers, who want to benefit from high global prices. Cotton output this year is estimated at 32.5 million bales, as against 29 million last year.

With the existing registration period over on December 15, fresh registrations for exports are likely to begin soon.

 

 

Source: http://www.business-standard.com/india/news/dgft-to-again-authorise-cotton-exports-revised-rules-coming/418723/

 

Chinese cotton buyers visit Rajkot to buy Shankar 6 variety

2010-12-17 15:10:00

Chinese cotton buyers visited Gujarat's Rajkot city to buy the famous Shankar 6 variety of cotton.

Shankar 6 variety of cotton is famous worldwide and it is a major product of the Saurashtra region.

A Chinese buyer said there is an increased demand of the Shankar 6 variety in China.

"China textile may find this variety very rare. Because of a good allowance and a very good market here, it is very good to use. We have a good demand and most of our customers have enquire on this variety of cotton," said Liu Xue Lear of the Changzhou Linunyuam Textile Materials Company.

Over the past few years, the cotton industry has achieved tremendous growth with sophisticated equipments and quality management system that convert raw cotton into a high-quality product.

Akash Chapadia, a cotton exporter, said they have huge market in China.

"The maximum demand is for the Shankar 6 variety of cotton. They find it more beneficial as they prefer more length and its length can come till 29 or 30. So, because of this reason they prefer this," said Chapadia.

"The thread that is formed out of this is long as well and thus profit is more and cost cutting can be done. So, they prefer Shankar 6," he added. By Parish Joshi (ANI)

 

 

Source: http://www.sify.com/news/chinese-cotton-buyers-visit-rajkot-to-buy-shankar-6-variety-news-national-kmrpkdejifd.html

 

Indian indecision, Chinese demand benefit cotton

Dec 16, 2010 12:50 PM

An indecisive India, the globe's second-largest cotton grower, helped increase the price of the soft commodity to its highest rate in a month, Bloomberg reports.

Farm minister Sharad Pawar said last month that India would decide by early December whether to stop restricting exports of the fiber but no decision has been publicized. Prior to Thursday, cotton prices have climbed 88 percent this year in response to efforts to satisfy increasing demand from the world's biggest user of cotton, which is China.

"Prices have been propelled as a decision by the Indian government may be made much later than earlier anticipated," according to a report by Andy Ryan, a senior risk-management consultant at FCStone Fibers & Textiles in Nashville, Tennessee.

While en route to the biggest annual gain since the early 1970s, cotton for March delivery climbed 2.3 percent to $1.4543 per pound shortly after 11 a.m. in New York. On November 10, cotton's price was $1.5195 per pound.

"Technically, the market looks very bullish," Sharon Johnson, a senior analyst at Penson Futures in Atlanta, told Bloomberg earlier this week.

 

Source : http://www.danielstrading.com/resources/news/Futures-Market-News/Indian-indecision--Chinese-demand-benefit-cotton_800297273/

Cotton Prices Jump to One-Month High as India Delays Export-Limit Decision

By Debarati Roy - Dec 17, 2010 2:34 AM GMT+0530 Thu Dec 16 21:04:20 GMT 2010

Cotton futures jumped to a one-month high on signs of a delay in lifting limits on exports from India, the world’s second-biggest producer. Orange juice was little changed.

In November, India’s farm minister, Sharad Pawar, said India would decide by Dec. 3 on easing a cap on shipments. No announcement has been made yet. Futures have surged 93 percent this year, heading for the biggest annual gain since 1973, as growers struggled to meet mounting demand from China, the biggest user.

“Prices have been propelled as a decision by the Indian government may be made much later than earlier anticipated,” Andy Ryan, a senior risk-management consultant at FCStone Fibers & Textiles in Nashville, Tennessee, said in a report.

Cotton for March delivery rose 3.98 cents, or 2.8 percent, to settle at $1.4612 a pound at 3:21 p.m. on ICE Futures U.S. in New York. Earlier, the price gained by the exchange limit of 4 cents to $1.4614, the highest since Nov. 10, when the fiber reached a record $1.5195.

India said in September that it would cap shipments at 5.5 million bales in a bid to meet domestic demand. An Indian bale weighs 375 pounds, or 170 kilograms.

Futures have climbed six times in the past seven sessions.

“Technically, the market looks very bullish,” Sharon Johnson, a senior analyst at Penson Futures in Atlanta, said this week.

 

China is the biggest grower, and the U.S. is the leading exporter.

Orange-juice futures for January delivery gained 0.15 cent, or 0.1 percent, to $1.5615 a pound.

The price tumbled 6.6 percent in the previous two days as concerns ebbed that freezing weather would hurt citrus crops in Florida, the second-biggest grower.

The commodity is up 21 percent this year. Brazil is the top producer.

 

 

Source: http://www.bloomberg.com/news/2010-12-16/cotton-prices-jump-to-one-month-high-as-india-delays-export-limit-decision.html

 

Farmers keep cotton stocks for more price

December 17th, 2010

Dec. 16: Hundreds of cotton farmers are keeping cotton produce stocks in their houses instead of selling them, anticipating a hike in price once the Central government extends the date for cotton exports. This had ended on December 15.

The Central government gave permission for export of 50 lakh bales but only 30 lakh bales of cotton was exported by the last date. Cotton farmers hope for exports to get a good price to compensate the loss they had incurred due to untimely rains and floods.

Some farmers who have good relations with cotton traders have stocked their produce in the latter’s godowns and will sell this when they get a good price.

Farmers in the district are not selling cotton now due to a drastic fall in price in the last 15 days. Traders offered Rs 4,000 in the beginning of the commercial operations of cotton but the price came down after a few days, disappointing cotton farmers and even leading to protests.

Source: http://www.deccanchronicle.com/karimnagar/farmers-keep-cotton-stocks-more-price-427

DGFT to register cotton export contracts

Move to allow shipments based on Ministers' panel decision.

Our Bureau

New Delhi, Dec. 17

The Directorate General of Foreign Trade (DGFT) will now issue Export Authorisation Registration Certificate (EARC) to cotton exporters in place of the Office of Textile Commissioner, Mumbai with immediate effect. The EARCs will be issued for the remaining portion of the 55 lakh bales that were allowed for shipments this season (October 2010-September 2011).

A notification issued by the DGFT late on Thursday said that with immediate effect, the DGFT would issue the EARCs for exports of cotton, not carded or combed, Bengal deshi, Indian cotton of staple lengths from 20.5 mm to 34.5 mm and above, cotton other than Indian, of all staple lengths, cotton waste (including yarn waste and garneted stock) and cotton, carded or combed.

Stating that the export contracts of cotton would now be registered by the DGFT when such registrations were hitherto vested with the Textile Commissioner, Mumbai, a policy circular from the DGFT said that it was the decision of meeting of Group of Minister that 55 lakh bales of cotton should be allowed for export during the cotton season 2010-11 (October to September).

Actual exports began from November 1 under the EARCs granted by Office of Textile Commissioner, Mumbai, giving 45 days' time to make such exports. It has now been brought to the notice of the Government, the circular said, that actual exports under such registered contracts are much less than the quantity approved by the Government.

Hence, the notification issued by the Commerce Ministry through the DFGT on Thursday stipulates that henceforth registration of contracts for export of cotton would be done by the DGFT. The precise modalities of such registrations and conditions that need to be fulfilled or adhered to would be notified separately, once the balance quantity that remains to be shipped is ascertained, it was clarified.

Even as the Government sticks to its stance of shipping 55 lakh bales of cotton export this season, the Confederation of Indian Textile Industry (CITI) and the knitwear apex body, the Tirupur Exporters Association (TEA) had drawn attention to the shortage of raw cotton for domestic consumption in general and to textile segments in particular.

They also disputed the Cotton Advisory Board (CAB) estimates of production of 325 lakh bales this year due to loss of crop in Gujarat and Maharashtra owing to excessive rains and in Andhra Pradesh due to floods

 

Source: http://www.thehindubusinessline.com/2010/12/18/stories/2010121851991200.htm

 

Powerloom weavers hit by high cotton yarn prices

Shashikant Trivedi / New Delhi/ Bhopal December 17, 2010, 0:49 IST

High cotton yarn prices on account of cotton exports have put thousands of powerloom weavers and processors in the town of Burhanpur under a tight squeeze. The weavers are already facing frequent power cuts and state government apathy.

“Burhanpur weavers have already been suffering for years. There is no let up in frequent power cuts and poor facilities, the recent decision of the Central government to allow cotton exports has prompted stock holding tendency among farmers and traders, we have no option but to buy costly yarn. Unlike Madhya Pradesh, the government of Maharashtra has offered slew of sops to our competitors in the neighbouring state (Maharashtra),” Ikram Ansari, All India Powerloom Board member told Business Standard. He led a delegation in the month of October and urged the Union government to allow cotton exports only when the arrival starts in mandis.

Besides, the powerloom weavers in Burhanpur have to face frequent power cuts. “Each day there is a power cut of six to eight hours. We have regular power load-shedding schedule in Burhanpur from 900-1,200 hours and 300-600 hours. It has made our work more difficult. We have to pay to labourers even if looms are not operational,” Ansari said, who was also the chairman of Ikram Ansari committee constituted few years back to suggest on revival of the powerloom industry in Burhanpur. However, traders have said the cotton yarn price surge is due to late arrivals and lower purchase by spinners.

Six years back the state government had accorded industry status to the sector but no benefit has been granted to these small cottage industry. “Most of the powerloom owners are offered slew of sops and concessions in the neighbouring state of Maharashtra. They are offered 30 per cent subsidy on powerloom purchase and other subsidies of the state government. Madhya Pradesh government has offered no exemption, no concession or subsidy so far despite that we also enjoy industry status,” he said.

Madhya Pradesh Bunkar Sahkari Sangh, a cooperative society, had been dissolved by the ruling Bharatiya Janata Party (BJP) in the state in 1994. “Since then they have not done anything to revive the cooperative, due to political reasons,” Ansari said.

Earlier as well, the state government had planned to shift the weavers from the main city which cannot accommodate more powerloom weavers due to the increasing population, had formed a co-operative called “Burhanpur Fairdeal Cooperative Society” to set up a textile park. But the state government turned down their demand for exemptions in stamp duty and registration of a 54-acres of land on which the looms were supposed to be shifted. But later the members refused this demand of the government as “stamp and registration charges were more than the cost of the land”.

The decline of the powerloom units began in 1986, when the town started facing power shortages and entry tax on cotton was imposed. Though no accurate data are available on operational powerlooms in the state, local associations’ records say of the 32,800 installed powerlooms in Burhanpur, 29,000 powerlooms are operational. “State government will soon work out a plan to address problems of the powerloom industry,” a senior government official said.

 

Source : http://www.business-standard.com/india/news/powerloom-weavers-hit-by-high-cotton-yarn-prices/418577/

Indian cotton export falls short as the deadline passes byDecember 16, 2010 (India)

Rough estimate is that India’s export as of December 15, 2010 is 25-30 lakh bales (2.5-3 million bales). Each Indian bale consists of 170 kg. December 15th was the deadline for cotton exporters to physically ship the allowable limit of 5.5 million bales. 

Government of India has set the export limit of 5.5 million bales allowing the physical shipment from November 1, 2010. Exporters are allowed to export with an approved Export Authorization Registration Certificate (EARC). Shipment period is restricted to 45 days from the date of issue of EARC by the government or December 15th, whichever is later. From sources, it is clear that the target export limit of 5.5 million bales has not been reached by the December 15th deadline.

As of December 16, 2010 (8.00 hrs IST), Government of India has issued EARC for 50 lakhs 23 thousand 1 hundred and 40 bales (roughly 5.02 million bales of 170 kg each). The government has rejected the export registration for 2 lakhs 72 thousand and 720 bales (roughly 0.27 million bales of 170 kg each). Per an official notification from the Office of the Textile Commissioner, India dated September 30th; the deadline for the shipment of the allowed 5.02 million bales was December 15th. Although, it will take a few weeks to know the actual exported amount, estimates are that 2.5 to 3 million bales would have been shipped by the December deadline. This leaves a shortfall of 2.5 to 3 million bales per the allowable maximum limit of 5.5 million bales. 

While speaking with this reporter from Mumbai of December 15th, Mr. Subhash Grover, Chairman and the Managing Director of Cotton Corporation of India agrees with the rough estimate of the cotton exported as of December 15th. Mr. Nayan Mirani of Khimji Visram and Sons, Mumbai, who is also the Vice President of Cotton Association of India in speaking to Seshadri Ramkumar on December 15th also agrees with the exported cotton amount to be about 2.5 to 3 million bales. However, he emphasized that this estimate is his personal estimate and does not reflect Cotton Association’s estimate.

Mr. A. B. Joshi, Textile Commissioner, Government of India in a telephone conversation with Seshadri Ramkumar on the late afternoon of December 15th from Mumbai clarified about the situation with regard to government’s decision on the export of remaining bales. 

He advised that until the government receives the actual shipment data from ports, the government will not be in a position to make any decision. The exporters have 21 days from the actual shipment of cotton to report the exact shipment data to the government. Therefore, it will be first week in January 2011 to get actual verifiable shipment data. The data has to be compiled so that the meeting of Central Ministers of the departments of Agriculture, Textiles, Commerce and Finance can convene to make a decision. This ministerial group will be making the decision on export and looks like it will be the end of January 2011 when such a decision from India can be made. 

Mr. Joshi, who is also the Chairman of India’s Cotton Advisory Board, commented that the latest estimate of the board for 2010/11 production, which is at 32.5 million bales, will be able to be met for this cotton season ending in September 2011.

A decision on the export of the un-exported quantity of 2.5 to 3 million bales (170 kg each) per the earlier agreed maximum amount of 5.5 million bales will not come until the end of January next year and the allowable amount may also vary depending on the situation at hand, which the Cabinet Ministerial group will decide.

Seshadri Ramkumar, Texas Tech University

Source :http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=94005&page=1

India under fire over restriction on cotton exports-

Sheila Mathrani

Posted: Thursday, Dec 16, 2010 at 0121 hrs IST

 

India is being accused of violating its WTO obligations by putting quantitative restriction on cotton exports. Textile groups from over 14 countries (including the 27 member EU) have protested against quantitative restriction on cotton export from India which is affecting the global prices. The US textile industry has written to its decision makers to take action against India. Since April 2010, when India banned cotton export, the prices have skyrocketed.

According to just-style.com, textile groups from 10 Latin America countries have also called for action against India for violating WTO rules by restricting cotton export and contributing to global shortage. The groups claim that the Indian government is subsidising its textile and apparel export sector by restricting exports of cotton and there is a price difference of 16 cents per lb between what the Indian textile and apparel mills pay for their cotton and the worldwide price of cotton.

On December 3, the American Apparel and Footwear Association (AAFA) wrote to the US authorities to “send a message to India to immediately end” its restrictions on the export of cotton and ensure that the restrictions are not extended to cotton yarn and other products utilising cotton. “The Indian government must follow international trade rules,” the association said.

Addressing their plaint to USTR Ron Kirk, defence secretary Robert Gates, commerce secretary Gary Locke, agriculture secretary Thomas Vilsack and secretary of State Hillary Clinton, AAFA claims that the India's actions violate Article XI of the GATT agreement which prohibits export bans that benefit domestic industries. The AAFA states that India's export cap is intended to “artificially” lower prices on an integral input used by India's apparel and textile industries, industries which “were already major competitors in the global market.”

Since India’s quantitative restriction on cotton export, prices have more than doubled from an average of 62 cents per pound in April 2010 to around $1.40 per pound. India was the second largest exporter of cotton in the world prior to the ban. The US apparel, footwear and textile manufacturing base supplying to the US military are unable to bid for contracts as the price of cotton is volatile.

India`s decision and resultant soaring cotton prices the US Apparel industry has a choice of either absorbing the rising costs, and thus putting the “fragile economic recovery of the U.S. apparel industry” at stake, or passing the rising costs to the consumer when families can least afford it.

Source: http://www.financialexpress.com/news/india-under-fire-over-restriction-on-cotton-exports/725370/

Now DGFT to register cotton export contracts

17/12/2010

New Delhi, Dec 16 (PTI) Directorate General of Foreign Trade, from now onwards, will register cotton export contracts instead of the Textiles Commissioner, the Commerce Ministry said today.
However, no reason was assigned why the registration work has been shifted from the Textiles Commissioner to the DGFT, the trade arm of the Commerce Ministry.
"The contracts for export of cotton shall be registered with the DGFT prior to shipment," a Commerce Ministry notification said.
The decision comes when only about 25 lakh bales (1 bale is equal 170 kg) of cotton could be exported of the total 55 lakh bales permitted for the season, which runs from October to September.
The exports were allowed from November 1 and the entire quantity of registered bales was to be shipped out by December 15.
The Textiles Commissioner, who was doing the registration, had suspended registration after it received applications equal to the exportable surplus quantity(55 lakh bales).
However, it had also said, "the (online registration) facility may be resumed if exportable surplus quantity becomes available".
Textiles Secretary Rita Menon yesterday said that the government would start "fresh" registrations for the remaining cotton which is yet to be exported.
The government was in process of collecting data on the cotton exports till December 15.
The commodity prices in India have witnessed a rise of about 89 per cent in the fast few months, according to the government estimates.
This is despite projections of a record production of cotton at 325 lakh bales in 2010-11.
Cotton production is expected to total 335 lakh bales in 2010-11.

Source :http://news.in.msn.com/business/article.aspx?cp-documentid=4706174

Supply squeeze to keep cotton price high - Fitch

Cotton prices are to "remain firm" through 2010-11, supported by the fibre's supply squeeze, Fitch Ratings has forecast, as it warned that the rally threatens Indian yarn mills with closure.

Cotton prices will stay "well above those" of the 2009-10 crop year, which ended in September, "due to the huge international demand-supply gap" which has emerged as economic recovery boosts demand following depleted harvests in many countries.

 

Prospects for India's crop, the world's second biggest after China's, had been eroded by "untimely rains in major cotton producing states", Fitch said.

 

The Confederation of Indian Textiles Industry said last week that Indian output may come in at about 5.1m tonnes, roughly 425,000 tonnes below the estimate by the country's official Cotton Advisory Board.

Export conundrum 

Cotton prices eased in New York on Monday, slipping 1.4% to 142.53 cents a pound for March delivery.

However, this follows a rebound of some 30% from a late-November low, as fears have waned of heavy measures to quell the economy in China, which also the top consumer and importer of the fibre.

Meanwhile stocks in the US, the leading cotton exporter, are on course to end 2010-11 at 1.9m bales, their lowest for at least 50 years, the US Department of Agriculture said last week, an estimate which assumes a rapid slowdown in the current firm pace of shipments.

"Export sales are currently running at 87.5% of the USDA's projection for the entire marketing year, far above the average pace of 51.8% seen at this point," Terry Roggensack at US analysis group Hightower Report said.

"The USDA is apparently assuming that the cotton market will continue to rally and that this will bring a sharp drop in the pace of export sales in coming months."

'Spinners will suffer'

Prices have soared in India too, up 60-70% in the first 11 months of the year, despite measures such as export curbs aimed at protecting domestic buyers.

"The capping has not helped the domestic textile sector much in the backdrop of soaring international cotton prices, which has encouraged speculation by traders and creation of artificial scarcity in the domestic market," Fitch said.

Meanwhile a limit of 720,000 tonnes on yarn exports, to be shipped by mid-January, to protect textile mills, looks set to worsen pressure on spinners attempting pass on cotton price hikes.

"Yarn spinners will suffer as their selling prices are likely to fall," the ratings agency said.

"Smaller cotton spinning mills face the threat of shutting down if they are unable to buy and stock cotton in the ongoing cotton-buying period of October 2010-February 2011."

 

Ratings implications

Fitch cited Mountain Spinning Mills and Tuticorin Spinning Mills as companies at a "higher risk" of liquidity pressures which could warrant a review of credit ratings.

"Sharmanji Yarns is partly insulated from such volatility by its presence in polyester blended yarn."

 

Source: http://www.agrimoney.com/news/supply-squeeze-to-keep-cotton-price-high---fitch--2613.html

 

Cotton production to rebound on strong market prices

December 15, 2010 (Global)

The latest U.S. Department of Agriculture (USDA) World cotton production for 2010/11.

World cotton production in 2010/11 is forecast at 115.5 million bales, up 14 percent from a year earlier, as producers respond to strong market prices for the fiber. Production in major cotton producing countries, such as Australia, Brazil, and India is expected to rise to record highs, and, in others, the 2010/11 crop is estimated at levels not attained in recent years.

Australia’s 2010/11 production is forecast at a record 4.0 million bales, up 125 percent from a year ago, due to significant improvement in water supplies and strong market prices. At 4.0 million bales, Australia’s share of world cotton production will be 3.5 percent, the highest in a decade. Australia’s 2010/11 harvested area is estimated at a record 560,000 hectares; a 180-percent increase from the previous year as more irrigated area and dryland area are put under cotton cultivation. 

Australia’s overall 2010/11 cotton yields which until now were the world’s highest are expected to decline 20 percent to 1,555 kg/ha from the preceding year due to increased use of lower-yield dryland area. This expected yield decline will rank Australia second to Israel among countries with the world’s highest cotton yields. Planting in Australia a Southern hemisphere country has been completed in some areas but the recent excessive rainfall could delay planting progress and cause crop damage.

Brazil is expected to produce a record 8.1 million bales in 2010/11, up 49 percent from the previous year as favorable market conditions spur area response in this Southern hemisphere country. Planting is well underway and Brazil’s 2010/11 harvested area is expected to increase 45 percent to 1,215,000 hectares, from a year ago. Brazil’s 2010 cotton yield is expected to increase 2 percent from the previous year to 1,452 kg/ha. 

It its December 2010 report, Brazil’s National Food Supply Company, Companhia Nacional de Abastecimento (CONAB), forecasts Mato Grosso and Bahia to produce 51 percent and 32 percent, respectively, of the 2010/11 crop. The Brazilian agency also expects the two leading cotton growing States to account for 83 percent of the harvested area in 2010/11, shy of the previous year by just 1 percent.

Except for China and Pakistan, 2010/11 production is expected to increase in all other major cotton producing countries. India’s 2010/11 production is estimated at a record 26.0 million bales, a 12-percent increase from the preceding year. Area harvested in India in 2010/11 is expected to increase 7 percent from a year ago. The United States is expected to produce 18.3 million bales in 2010/11, up 50 percent from a year earlier. Area harvested in the United States in 2010/11 is estimated to increase 43 percent from a year ago to 4.36 million hectares, the highest since 2006/07. 

China’s 2010/11 crop is estimated to decline 6 percent to 30.0 million bales from the previous year. Wet and cold weather conditions in October this year in several cotton growing regions damaged some cotton bolls, negatively affecting both yield and quality of the fiber. China’s 2010/11 cotton yield is estimated at 1,281 kg/ha, down 3 percent from a year ago. Pakistan and Uzbekistan are expected to produce 8.8 million bales and 4.8 million bales in 2010/11, down 8 percent and up 23 percent, respectively, from the previous year.

World total harvested area in 2010/11 is expected to increase 11 percent to 33.3 million hectares from the previous year and global yield is forecast at 754 million hectares, a 3-percent increase from a year earlier.

World 2010/11 Cotton Trade to Surge Due to Robust Chinese Demand

World 2010/11 cotton trade is forecast at 38.7 million bales, a 9-percent rebound from the previous year and the highest in 3 years. The United States, the world’s leading exporter of the fiber, is expected to export 15.8 million bales in 2010/11, up 31 percent from the preceding year and highest export volume since the 2005/06 marketing year. India, which continues to put restrictions on cotton exports, is expected to export 4.8 million bales in 2010/11, a 27-percent decline from a year earlier. 

Australia’s 2010/11 exports are expected to increase for the second consecutive year to 2.7 million bales, up 28 percent from the previous year. Brazil is forecast to export 2.65 million bales in 2010/11, an increase of 33 percent from a year earlier. Increased demand for cotton from China and restrictions on cotton exports from India are expected to contribute to strong export responses from several major exporting countries.

China’s 2010/11 imports are expected to rebound 38 percent to 15.0 million bales from the previous year amidst growing concerns over declining Chinese production and ending stocks. At 15.0 million bales, China’s share of global imports will be 39 percent, the second highest trade share on record. Bangladesh, currently the world’s second largest importer of the fiber, is forecast to import a record 34.95 million bales in 2010/11, up 4 percent from a year earlier. In Turkey, Indonesia, and South Korea, 2010/11 imports are expected to decline 29 percent, 8 percent, and 1 percent, to 3.1 million bales, 1.9 million bales, and 1.0 million bales, respectively, from the previous year.

Click here for more details

U.S. Department of Agriculture (USDA)

 

Source: http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=93973

 

Cotton farmers demand increase in export quota

BS Reporter / Mumbai/ Ahmedabad December 15, 2010, 0:15 IST

At a time when the deadline for cotton exports comes to an end on December 15, the farmers' groups and federations are seeking an increase in cotton export quota from the current 55 lakh bales (one bale = 170 kg) to around 90 lakh bales.

The demand to raise the cap on cotton exports from India was made in a meeting with Sharad Pawar, minister of agriculture, government of India, on Monday in Delhi.

Cotton farmers fear a steep fall in prices if the export quota limit is not raised as it would lead to an increased supply of cotton in the domestic market.

Maganbhai Patel, a veteran farmers' leader and president, Bhartiya Kisan Sangh (BKS) informed Business Standardthat the increase in export quota is inevitable to avoid creation of substantial cotton surplus in the domestic market. "In our meeting with the union agriculture minister, Sharad Pawar on Monday, we demanded raising cotton export quota to 90 lakh bales from the current 55 lakh bales. We have been given assurance that the government will take up the issue in their meeting on December 15, when the deadline for quota expires," said Patel.

The farmers of Gujarat had taken out a 'Kisan Swaraj Yatra' starting from Sabarmati Ashram to Rajghat in New Delhi. The rally spanning over a period of 17 days covered 20 states gathering support of farmers from different states on various issues.

In order to check spiralling prices of cotton in the domestic market, the union government had capped cotton exports from the country at 55 lakh bales, for which registration period started from October 1 and it expires on December 15. However, most of the industry players are of the view that the time limit set by the government for execution of exports of 55 lakh bales of cotton was very narrow and practically not feasible.

"The government had set a very narrow time period for order execution of cotton exports. Still today, about 20 lakh bales of the set quota is lying unshipped either at ports or at the warehouses. Practically, traders needed more time for exports," said NM Sharma, managing director, Gujarat State Cooperative Cotton Federation (GujCot).

In the wake of exports quota, cotton prices have already come under pressure. The prices have come down from Rs 47,500 per candy (1 candy= 356 kg) in October to Rs 40,000 per candy at present. Industry experts believe that the prices could plummet further if more exports are not allowed.

The demand for allowing more exports than the cap of 55 lakh bales stems from the fact that India is poised to have a fairly good cotton output in current cotton year (Oct-Sept).

Also, the cotton prices in the international market are ruling higher than the domestic market. Currently, the prices in global market are hovering around 125 cent per pound, which works out to be around Rs 48,000 per candy.

As per the industry estimates, the cotton production in the country is estimated to be around 330-340 lakh bales. However, government estimates peg cotton output in 2010-11 at not less than 325 lakh bales.

"Given the buoyant cotton output scenario, there is still room for more exports than the stipulated quota of 55 lakh bales," said Sharma, adding that the government should give separate quota for the farmers' organizations.

 

 

Source: http://www.business-standard.com/india/news/cotton-farmers-demand-increase-in-export-quota/418239/

 

World Cotton Production To Gain 14% In 2010-11 - ABARE

Capital Market / 11:09 , Dec 14, 2010

As per latest report from ABARE , world cotton production is forecast to increase by around 14 per cent in 2010-11 to 25.1 million tonnes in response to the relatively higher returns from cotton compared with alternatives such as corn and soybeans.

Larger cotton harvests are forecast for all major cotton producing countries, with the exceptions of China and Pakistan. In the United States, for example, the cotton harvest is complete and US production is estimated to have increased by 1.3 million tonnes in 2010-11 to 4 million tonnes.

The Indian harvest is around 60 per cent complete and cotton production is forecast to increase in 2010-11 by around 10.6 per cent to a record 5.7 million tonnes. This expected increase mainly reflects an increase in the area planted to cotton, especially increased plantings of higher yielding cotton varieties.In both Pakistan and China, weather events have adversely affected this season's cotton production to varying degrees. Despite severe floods in some cotton producing regions in Pakistan, cotton production in that country is forecast to decrease by only 0.1 million tonnes in 2010-11 to 2 million tonnes.

Chinese cotton production in 2010-11 is estimated to decline by0.5 million tonnes to 6.5 million tonnes, which would represent China's lowest lint output since 2005-06.

http://www.indiainfoline.com/Markets/News/World-Cotton-Production-To-Gain-14-percent-In-2010-11-ABARE/3443562276

Cotton Surges in N.Y. on Higher Demand, India Supply Concerns December 14, 2010, 3:51 PM EST

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By Debarati Roy and Jae Hur

Dec. 14 (Bloomberg) --Cotton futures rose to a one-month high on concern that global supplies will lag behind demand and India’s output may be lower than estimated.

Prices have surged 91 percent this year, heading for the biggest annual gain since 1973, on signs that growers would struggle to meet mounting demand from China, the biggest user. Output in India may miss the Cotton Advisory Board’s estimate, the Confederation of Indian Textiles Industry said last week.

“Concern about India crop coupled with Chinese demand is helping prices stay strong,” said Chris Kramedjian, a risk- management consultant at FCStone Fibers & Textiles in Nashville, Tennessee. “Also, there is overall bullishness in the market.”

Cotton for March delivery jumped 3.52 cents, or 2.5 percent, to settle at $1.4449 a pound at 2:55 p.m. on ICE Futures U.S. in New York. Earlier, the most-active contract climbed to $1.4597, the highest since Nov. 10. Prices have rallied for five straight sessions.

Output in India, the world’s second-biggest grower and exporter, may reach 30 million bales of 170 kilograms each (375 pounds), compared with 32.5 million bales estimated by the Cotton Advisory Board, the Indian Textile Industry group said.

U.S. Stockpiles

U.S. stockpiles at the end of the marketing year on July 31 will total 1.9 million bales, each weighing 218 kilograms, the lowest level since at least May 1996, the Department of Agriculture said Dec. 10. That’s 14 percent below the November estimate. The U.S. is the world’s biggest exporter.

Inventories held in warehouses monitored by ICE have plunged 72 percent this year. The U.S. crop will total 18.27 million bales in the harvest that farmers are now completing, down from the 18.42 million projected in November, the USDA said Dec. 10. The department cut its estimate for the second straight month. The previous harvest totaled 12.19 million bales.

“Cotton prices have been underpinned by the U.S. forecast for declining stockpiles and China’s rising demand,” said Han Sung Min, a broker at Korea Exchange Bank Futures Co. in Seoul.

Cotton prices in China will probably remain at “high levels” and won’t trade below 25,000 yuan ($3,757) a metric ton, the Cotton Research Institute said, citing a survey of farmers and processors.

Shortages, rising production costs and inflation will support prices, the institute said today on the China Cotton Association’s website. The report was prepared after November surveys of 1,628 farmers in 15 provinces, it said.

The price of seed cotton has increased 75 percent from last season to an average 10.8 yuan per kilogram, the institute said. Cotton futures for September delivery on the Zhengzhou Commodity Exchange rose 2.9 percent to close at 28,030 yuan a ton today.

“The demand for cotton coming out of China is just phenomenal,” O.A. Cleveland, an agricultural economist and a professor emeritus in agricultural economics at Mississippi State University, said today on a conference call organized by Ag Market Network. “They’re very much in the market to buy and replenish” supplies, he said.

--With assistance from William Bi in Beijing and Elizabeth Campbell in Chicago. Editors: Steve Stroth, Daniel Enoch.

 

http://www.businessweek.com/news/2010-12-14/cotton-surges-in-n-y-on-higher-demand-india-supply-concerns.html

 

China’s Cotton Prices to Stay High, Researcher Says

By Bloomberg News - Dec 14, 2010 3:35 PM GMT+0530 Tue Dec 14 10:05:38 GMT 2010

Prices of cotton in China will probably remain at “high levels” and won’t trade below 25,000 yuan ($3,757) a metric ton, the Cotton Research Institute said, citing a survey of farmers and processors.

Shortages, rising production costs and inflation will support prices, the researcher said in a report posted on the website of the China Cotton Association today, without giving a timeframe for the price forecast. The report was prepared after November surveys of 1,628 farmers in 15 provinces, it said.

The price of seed cotton has increased 75 percent from last season to an average 10.80 yuan per kilogram, it said. Cotton futures for September delivery on the Zhengzhou Commodity Exchange rose 1.9 percent to close at 28,105 yuan a ton today.

Cotton for March delivery traded on ICE Futures U.S. in New York jumped by the exchange limit of 5 cents to $1.4597 a pound today, the highest price since Nov. 10, before trading at $1.457 a 5:30 p.m. Singapore time. The most-active contract reached a record $1.5195 on Nov. 10 and has surged 93 percent this year.

Most of farmers responding to the survey said they wanted to increase planting, the report said. Still, higher costs of materials, labor and “complicated management cloud the prospect of increased cotton planting,” it said.

The institute is a unit of the state-run Chinese Academy of Agricultural Sciences, according to its website.

 

Source: http://www.bloomberg.com/news/2010-12-14/china-s-cotton-prices-to-stay-high-researcher-says-update1-.html

New York cotton settles at one-month top

 NEW YORK  (December 14, 2010) : US cotton futures ended Monday up the daily limit at a one-month top on speculative buying, but dealings were light as most players seemed content to sit on the sidelines for the moment, brokers said. Cotton is the best performing commodity in the Reuters-Jefferies commodity index, up over 76 percent year to date.

-- Chinese benchmark rate decision gives cotton a boost

The benchmark March cotton contract on ICE Futures US rose the 4.00 cents daily limit to finish at $1.4097 per lb, with the session low at $1.3697. It was the highest close for the second position cotton contract in over a month. Total volume traded hit about 12,500 lots, about two-thirds below the 30-day average of 34,500 lots, Thomson Reuters preliminary data showed.
Market sentiment was aided by news that China only raised reserve requirements for banks instead of benchmark interest rates, easing worries of a slowdown in a prime engine of the world's economy. "Everything was based on the Chinese not raising interest rates," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana. China is the world's biggest consumer of cotton. With benchmark interest rates not increasing, traders said that meant cotton consumption in China will remain strong given the robust economic growth rate being posted by the country.

The limit-up close meant cotton ended the day above the session top of $1.4095 set on Friday. "It does portend higher (cotton) prices sooner rather than later," said Stevens. In China, cotton prices went up on Monday with the May cotton futures last done at 27,535 yuan per tonne, up 880 yuan on the day.

The market's attention will soon turn to prospective spring 2011 cotton plantings in countries such as the United States and China. Analytical firm Informa Economics upped its US cotton plantings forecast in 2011 to 12.2 million acres, a 4-year high and nearly 12 percent higher than 2010 cotton sowings of 10.909 million acres. Industry group National Cotton Council will release its survey of potential cotton sowings in February and the USDA will hand out its own potential cotton plantings data on March 31, 2011

Source: http://www.brecorder.com/news/cotton-and-textiles/world/1134062:news.html

Loss in Gujarat cotton crop may be higher

Farmers report sharp fall in production as rain hits crop.

Ruined to the roots:A farmer points to the damage caused to the roots by rains at Kotada village in Gujarat's Porbandar district. Many such farms have been damaged in the Saurashtra region due to the unseasonal rains that lashed these parts in early November. —

M.R. Subramani

Recently in Porbandar

Mr Parbatbhai Khemabhai Varu of Kotada village in Gujarat's Porbandar district went in for cotton on two acres of land as he has been doing in the last few years. But rain, post-Diwali, has dashed his hopes of good returns despite rise in cotton prices this year.

“I should get at least three tonnes on an acre but I don't think I will get even 600 kg,” he says, as he tends to his cotton field that has been affected badly.

The main problem growers such as Mr Varu have faced this year is that rain has played truant during the first and second flowering stage of the plant. There are three flowering stages in cotton and each flowering results in cotton boll being developed and harvested.

“I am not expecting anything big from the third flowering as the plant has been affected,” he says, pulling out a plant to show the damage to the roots. The rain followed by onset of winter has affected the roots, resulting in growth becoming dormant in the plant.

Mr Shyamjibhai Raiyani, a pesticide distributor-cum-farmer who owns lands some 30 km from Rajkot, says the rain has resulted in the uprooting of at least 10 per cent of cotton plants. “Cotton farmers are plucking out the plant and going in for chana (gram),” he says. Mr Anilbhai B. Patel of Dhoraji village says he should have got at least 1,800 kg an acre but he was getting hardly 1,500 kg this year. The cotton trade has projected a 10 per cent drop in production against initial estimates but a drive from Porbandar to Rajkot gives an indication that the loss could be more than what is being feared. At least 70 lakh bales are produced in the seven districts of the Saurashtra region.

The Cotton Advisory Board, which has representatives of farmers, trade, industry and Government, has pegged production this year at 325.48 lakh bales (of 170 kg each) against 295 lakh bales last year. Gujarat is projected to produce 106.82 lakh bales (98 lakh bales) of this. Arrivals of raw cotton in Gujarat market from October 1 are 2.24 lakh tonnes against 9.02 lakh tonnes during the same period a year ago.

There are two reasons for drawing conclusions of shortfall. One is farmers reporting drop in yield and the second is, as people such as Raiyani say, plants being uprooted.

However, traders such as Mr Jaisukhbhai Patel at Gondal say that the quality could be better in the third flowering that will result in arrivals from January.

Says a trade source: “We think the area planted in Gujarat is up by 2.5 per cent from last year. And we think yield is much improved due to good monsoon in July and August and we do not think losses due to the rains in November will be as much as some people report. Rains impact the quality of the cotton more than the quantity.”

However, exporters such as M.P. Patel say the production could be some 10 per cent lower than initial estimates of 350 lakh bales.

Mr Anand Popat, vice-president of the Saurashtra Ginners Association, says only in places where the rain was accompanied by heavy wind has the plant fallen. “Otherwise, water has seeped into the cotton flower and it could affect the quality,” he says.

Mr Narendrabhai N. Limbasaya, a farmer from near Rajkot, says there is at least 30 per cent drop in yield on his farm. “The production drop could be much higher than what the trade is projecting,” he says.

Why India is Crippling the Cotton Industry

December 14, 2010

By Dr. Seshadri Ramkumar, Texas Tech University

Editor’s note: This story first appeared in FCI’s sister publication Cotton International. Visit their website for more news and trends about the cotton industry.

One week ago, the government of India capped cotton yarn exports to protect the interest of weavers, imposing a limit of 720,000 tonnes.
The past few months have been highly politically charged with regard to the Indian cotton and cotton textiles scenario. Every segment of the textile industry has been doing its level best to protect its raw material supply, including government officials (who capped exports for this year at 5.5 million 170 kg bales), spinners, power loom weavers, handloom weavers, and dyeing and finishing units.

Regulating the exports of cotton and cotton yarn has been a subject of contention and debate every year in India. In September, officials created a Cotton Yarn Advisory Board, which was charged to create a cotton yarn balance sheet for the country.

According to the Board, for the financial year that runs from April 2010 through March 2011, India will produce 3.46 million tonnes of cotton yarn, domestic demand will total 2.66 million tones, and 720,000 tonnes will be exported. This exportable limit is the highest it’s been in three years, according to the Office of the Textile Commissioner.

On Nov. 20, the government launched an online system to register cotton yarn exports in Chennai, the capital of the State of Tamil Nadu. Tamil Nadu is the home of 60 percent of the total spinning mills in India (1,931 of the country’s 3,200 spinning mills). Unlike in the United States and other developed nations, there continues to be investment in the spinning sector.

The cotton and cotton yarn situation has received the highest political attention, including the intervention of the Chief Ministers of the State of Tamil Nadu and West Bengal. Because the textile industry is a big bread basket for millions of people in India--particularly in the southern state of Tamil Nadu—and because the election to the state legislature is coming in 2011, the textile situation is getting tense.

On Dec. 2, the Chief Minister of Tamil Nadu wrote to Dr. Manmohan Singh, the Prime Minister of India, asking him to immediately suspend cotton exports until domestic mills’ requirements are met, and to put a cap cotton yarn exports. He has also asked for an export duty on cotton yarns.

Indian spinners have received export contracts for 779,816 tonnes and have already shipped 458,047 tonnes. Indian spinning mill associations are asking the government to allow them to export all of the yarn they have contracts for. According to export regulation, spinners have 45 days to ship cotton yarns from the date of registration, meaning they will have until mid-January 2011 to export the remaining 261,953 tonnes. The spinning mills will be running at maximum capacity for the next 45 days to meet that timeframe.

Source: http://www.farmchemicalsinternational.com/news/marketupdates/?storyid=2885

Cotton output likely to be around 325 lakh bales

Press Trust of India / Mumbai December 14, 2010, 13:43 IST

Cotton output in India this year is expected to be around 325-lakh bales, a senior government official said today.

"I am sure that it will not be less than 325-lakh bales," Textile Commissioner, A B Joshi, said at a FICCI-organised event on sports textiles here.

Concerns have been expressed in the past few months about cotton production in the country likely to get affected following unseasonal rains.

"Yes, rains had a damaging effect on cotton output, especially in regions like Andhra Pradesh which was hit by cyclonic showers. But as a counter, production from other pockets like Maharashtra has been very high and rains have in fact, helped increase the output," Joshi said, indicating that it is a mixed-bag sort of situation.
The Cotton Advisory Board (CAB) had made a prediction in August that production could be around 325-lakh bales.

Various industry bodies have given different estimates ranging from 300-lakh bales to 350-lakh bales, indicating divergent views on the impact of the rains on cotton production.  

The CAB's prediction is generally very sound and historically it has not gone wrong, the Textile Commissioner said, adding a review of the estimate will be done at a CAB meeting to be held shortly.     

The cotton crop in India is sown in June-July and its harvesting is done in September.

The crop starts hitting the market from October onwards.

Source: http://www.business-standard.com/india/news/cotton-output-likely-to-be-around-325-lakh-bales/119147/on