Posted: November 28, 2010 - 1:44am
A bounce from a steep sell-off in cotton futures to close back above the 50-day moving average, basis most-active March, just ahead of Thanksgiving inspired visions of an initial step in the potential establishment of a reaction low.
March — rebounding after posting only one prior higher finish in 10 sessions — closed with a solid gain near the high of Wednesday’s range but still was assured of a losing week in abbreviated trading set for Friday.
The benchmark contract lost 756 points to 116.59 cents for the holiday-shortened week ended Wednesday. Spot December shed 951 points to 119.39 cents and December 2011 fell 143 points to 87.96 cents.
However, March also closed back above a 50 percent retracement (112.73) of its huge move from its July low of 73.50 cents to its contract high of 151.95 cents on Nov. 10. At the week’s low of 111.13 cents, March had lost 26.9 percent from its lifetime high.
Cash grower sales slowed to 27,152 bales on The Seam for the four-day trading week. These were down from the prior week’s 42,962 bales. Daily average prices declined to 105.l82 to 121.43 cents. Premiums over loan redemption rates fell to 50.88 to 65.78 cents.
Domestic mill use topped most expectations at a healthy seasonally adjusted, annualized rate of 3.783 million bales in October, up 3.3 percent from an upwardly revised 3.664 million the prior month and 11.2 percent from 3.402 million in October 2009. The USDA forecast for the crop year is 3.45 million bales, down a bit from 3.46 million in 2009-10.
Annualized rates now have exceeded year-ago levels six months in a row. Rates for the first three months of the marketing year have averaged 3.575 million bales, up 8.4 percent from August-October last season.
The market initially shrugged off news that China told banks to expand lending to agricultural producers, processors and traders and cut loans to non-agricultural sectors as part of efforts to curb inflation.
Cotton was among the major agricultural products mentioned in a China Banking Regulatory commission statement as needing financial support because they are in short supply. The CRBC told banks to simplify loan procedures and shorten loan approval times for agricultural applicants.
Banks that extend loans used for speculation, hoarding and price manipulation in the agricultural sector will be severely punished, the statement said.
While China’s cotton imports from all destinations last month fell 19 percent from October 2009 to 96,096 metric tons (441,400 bales), its imports from the United States have risen sharply for the crop year despite limited U.S. supplies.
U.S. all-cotton shipments to China totaled 860,900 running bales for the marketing year through Nov. 11, up 63 percent from 528,900 bales through the comparable period last season, according to Foreign Agricultural Service data.
China has booked 4.092 million running bales of U.S. cotton for shipment this season, up from just 900,000 bales a year ago and about a third of overall U.S. 2010-11 commitments. About 21 percent of China’s commitments have been shipped, against 59 percent of sales a year ago.
In other international news, cotton arrivals in India declined to 4.69 million bales (170 kilos or 375 pounds) for the season to Nov. 21 from 4.81 million during the corresponding period last season, the state-run Cotton Corp. of India said on its website.
Unseasonal rains dampened harvesting, the report said. The Cotton Association of India earlier this month estimated the crop at 35.7 million local-sized bales (27.8 million 480-pound bales), up from an earlier forecast by the Cotton Advisory Board of 32.5 million.
The latest USDA estimate projected the crop at 26 million (480-pound) bales, up from 23.2 million last season.
The market continued to tumble even after two large stoppers took 96 percent of the first-day December delivery notices issued by a major merchant. Allenberg Cotton Co. issued all the first-day December delivery notices, 367, for the house. Panterra stopped 232 or 63 percent and Newedge stopped 122 or 33 percent, both for customer accounts. The other 13 notices were scattered among five stoppers.
Panterra and Newedge continued stopping subsequent notices without retendering any. This suggested they may have been stopping for overseas interests. Notices going into the Thanksgiving break had totaled 426, including 416 from Allenberg.
Certificated stocks grew to 75,792 bales, still historically low but up from 43,586 bales a week earlier, with 20,947 bales awaiting review.
On the U.S. crop scene, harvesting advanced 8 percentage points during the week ended Nov. 21 to 86 percent completed, up 17 points from a year ago and 13 points from the five-year average, USDA reported.
The Texas harvest expanded 12 points to 80 percent done, ahead of 68 percent a year ago and 62 percent for the five-year average. High winds Thanksgiving week slowed the rapidly moving harvest in the High Plains.
Well over 80 percent of a record 5.74-million-bale crop projected for the High Plains was expected to be off the stalk by Thanksgiving and gins to have processed as much as 50 percent of the high-quality output, the Lubbock-based Plains Cotton Growers, Inc., estimated.
Meanwhile, trend-following funds sold a hefty net 10,223 lots to reduce their net long position to 40,934 lots in cotton futures with options during the week ended Nov. 23, according to supplemental traders-commitments data from the Commodity Futures Trading Commission.
This was their smallest net long position since Aug. 3. Index funds bought a net 583 lots to nudge their net longs up to 59,607 lots, and small traders sold a net 2,513 lots to cut theirs to 8,523 lots.
Commercials reduced outright shorts by 56,742 lots and longs by 44,588 lots, trimming their net shorts by 12,154 lots to 109,124. Futures-options open interest dropped 128,685 lots to 331,006. The reporting period encompassed the expiration of December options.
Source: http://lubbockonline.com/agriculture/2010-11-28/howell-rebound-inspires-visions-near-bottom-cotton-remains-pressured
Monday, November 29, 2010
Cotton exports may miss target
BS Reporter / Chennai/ Hyderabad November 29, 2010, 0:47 IST
Cotton exports from the country are likely to miss the target this season as production has been hit by unseasonal rains in Gujarat and Maharashtra and floods in Andhra Pradesh, according to a senior official of the Union ministry of textiles.
“We (ministry of textiles) are of the opinion that cotton exports before the December 15 deadline for closing exports are expected to touch just 2.5 million bales (170 kg per bale) as compared with the permitted 5.5 million bales,” said V Srinivas, joint secretary (cotton).
Speaking to mediapersons during a road show here, he said, “It looks like it (exports) will be around 2.5 million bales. However, trade bodies say it will be 2 million bales, which looks reasonable,” he said.
He said that the ministry had set a maximum limit of 5.5 million bales for exports, assuming it to be a bumper harvest. “Shortage of cotton products both in domestic and international markets pushed up prices.”
Union minister of state for textiles Panabaka Lakshmi said the Centre had sanctioned 40 integrated textile parks across the country, of which 25 were operational.
“The central government has committed Rs 1,400 crore, as against a projected investment of approximately Rs 20,000 crore towards development of these textile parks. The remaining parks will go on stream next year,” she added.
Cotton exports from the country are likely to miss the target this season as production has been hit by unseasonal rains in Gujarat and Maharashtra and floods in Andhra Pradesh, according to a senior official of the Union ministry of textiles.
“We (ministry of textiles) are of the opinion that cotton exports before the December 15 deadline for closing exports are expected to touch just 2.5 million bales (170 kg per bale) as compared with the permitted 5.5 million bales,” said V Srinivas, joint secretary (cotton).
Speaking to mediapersons during a road show here, he said, “It looks like it (exports) will be around 2.5 million bales. However, trade bodies say it will be 2 million bales, which looks reasonable,” he said.
He said that the ministry had set a maximum limit of 5.5 million bales for exports, assuming it to be a bumper harvest. “Shortage of cotton products both in domestic and international markets pushed up prices.”
Union minister of state for textiles Panabaka Lakshmi said the Centre had sanctioned 40 integrated textile parks across the country, of which 25 were operational.
“The central government has committed Rs 1,400 crore, as against a projected investment of approximately Rs 20,000 crore towards development of these textile parks. The remaining parks will go on stream next year,” she added.
Source: http://www.business-standard.com/india/news/cotton-exports-may-miss-target/416442/
Saturday, November 27, 2010
INDIA: Textile industry calls for crack-down on cotton exports
By: just-style.com | 26 November 2010
The Indian government's decision to make 5.5m bales of cotton available for export from the beginning of this month have been criticised by The Confederation of Indian Textile Industry (CITI) for creating an artificial shortage of the fibre for domestic spinning mills.
CITI is now calling on the government not to make any more raw cotton available for export markets during the year.
Registration of cotton export contracts began on 1 October, with the entire 5.5m bales quota snapped up in just ten days. But most of these registrations were speculative, CITI claims.
It suggests that if any of this cotton has not been shipped by 15 December it should not be released for shipment or fresh registration for at least two months. The hope is that by then the amount of cotton arriving in the market will have picked up.
"The situation can improve only if exports are postponed to the extent possible at this stage," CITI says.
It also suggests that any further registration of cotton export contracts should only be allowed against letters of credit, instead of the previous cash against documents (CAD) basis, for which no documents other than a contract were required.
The group also warns against the introduction of controls on exports or prices of cotton yarn, in the long-term interest of the entire textile value chain. Many spinning mills have export obligations for cotton yarn, it says, especially those in India's special economic zones (SEZs).
Last Friday (19 November) owners and senior managers in around 50,000 manufacturing units across India shut their factories to take part in a nationwide protest against a shortage of cotton yarns and rising prices.
The action, organised by the Apparel Export Promotion Council (AEPC), was aimed at persuading the government to ban cotton yarn exports to ensure there is enough available for domestic producers.
Indian cotton prices in India have more than doubled in the past year, from INR23000 ($501) a candy (356kg of raw cotton) in October 2009 to INR47000 ($1,025) earlier this month.
Source: http://www.just-style.com/news/textile-industry-calls-for-crack-down-on-cotton-exports_id109656.aspx?lk=dm
The Indian government's decision to make 5.5m bales of cotton available for export from the beginning of this month have been criticised by The Confederation of Indian Textile Industry (CITI) for creating an artificial shortage of the fibre for domestic spinning mills.
CITI is now calling on the government not to make any more raw cotton available for export markets during the year.
Registration of cotton export contracts began on 1 October, with the entire 5.5m bales quota snapped up in just ten days. But most of these registrations were speculative, CITI claims.
It suggests that if any of this cotton has not been shipped by 15 December it should not be released for shipment or fresh registration for at least two months. The hope is that by then the amount of cotton arriving in the market will have picked up.
"The situation can improve only if exports are postponed to the extent possible at this stage," CITI says.
It also suggests that any further registration of cotton export contracts should only be allowed against letters of credit, instead of the previous cash against documents (CAD) basis, for which no documents other than a contract were required.
The group also warns against the introduction of controls on exports or prices of cotton yarn, in the long-term interest of the entire textile value chain. Many spinning mills have export obligations for cotton yarn, it says, especially those in India's special economic zones (SEZs).
Last Friday (19 November) owners and senior managers in around 50,000 manufacturing units across India shut their factories to take part in a nationwide protest against a shortage of cotton yarns and rising prices.
The action, organised by the Apparel Export Promotion Council (AEPC), was aimed at persuading the government to ban cotton yarn exports to ensure there is enough available for domestic producers.
Indian cotton prices in India have more than doubled in the past year, from INR23000 ($501) a candy (356kg of raw cotton) in October 2009 to INR47000 ($1,025) earlier this month.
Cotton Exports to Miss Target; Quality Crop Earns a Premium
AHMEDABAD: Unseasonal rains in Gujarat and Maharashtra are changing all calculations in cotton trade. Exporters who rushed to book export contracts for 55 lakh bales, a maximum limit set by the government, assuming a bumper cotton crop are now finding it difficult to meet their export obligations.
With a fall in quality stock arrivals in Gujarat, Maharashtra and Andhra Pradesh markets, trade sources don’t see a 100% of fulfillment of shipments by December 15 deadline. As a result, there is a Rs 3,000 premium on top grade Gujarat cotton. So far, only 15 lakh bales have been delivered and a major portion of 40 lakh bales is yet to be shipped.
“Due to unseasonal rains, arrivals have been low, creating a shortage of quality stock,” said Tushar Sheth of Cotton Trade India, an Ahmedabad-based cotton portal. “Exporters are in a soup. They have contracted Gujarat-based varieties like Shankar 6 and are forced to pay a premium as prices in state are ruling higher than those in states like Maharashtra,” he added.
Currently, buyers are paying roughly Rs 3,000 premium per bale (170 kg) for the required quality. Shanker-6 variety has been witnessing high demand from the international yarn producers due to its good mic, staple length as well as strength. Besides, a sophisticated ginning industry in Gujarat supplies goods with a very low contamination. Cotton processed in Gujarat contains 1.5-2% of impurities much lower than the trash content of 3-3.5% elsewhere.
On Thursday, exporters bought cotton at a rate of Rs 44,200-44,500 while Maharashtra rate was lower at Rs 42,500-42,800. Prices made their high of Rs 47,000 during the last week when international market touched its all-time high level. December delivery future at ICE touched a level of 155 cents per lb last week. “There is all chance that exporters would not be able to deliver committed goods as arrivals are low.
Currently, their requirement is one lakh bales per day and arrivals are just half of that,” said Mr Sheth. Arrivals in Gujarat have dropped to just 25,000 bales from the 65,000 bales a week ago. Majority of market yards also closed down their activity till next Sunday. Only three yards Jasdan, Amreli and Vankaner were open on Thursday.
Elsewhere in the country, the arrivals decreased to 1.4 lakh bales from the 2.5 lakh bales last week. “Rain has stopped now and arrivals may return to the normal levels. But quality will be an issue,” said a Rajkot-based ginner. Askash Chapdiya, MD of Rajkot-based Fem Cotton, said, “I don’t see shipment above 32-35 lakh bales by December 15 as ginners are not able to produce quality stocks.
The current arrivals are containing higher moisture levels and so ginners don’t get the required output.” Normally, cotton contains 8-9% moisture but new arrivals contain 13-14% of moisture. “Cotton crop has seen big damage during the last week. Standing crop’s colour also turned yellow,” said BK Kikani, former vice-chancellor of Junagarh Agriculture University.
Source: http://www.infodriveindia.com/Export-Import-News/cotton-exports-to-miss-target-6013.aspx
With a fall in quality stock arrivals in Gujarat, Maharashtra and Andhra Pradesh markets, trade sources don’t see a 100% of fulfillment of shipments by December 15 deadline. As a result, there is a Rs 3,000 premium on top grade Gujarat cotton. So far, only 15 lakh bales have been delivered and a major portion of 40 lakh bales is yet to be shipped.
“Due to unseasonal rains, arrivals have been low, creating a shortage of quality stock,” said Tushar Sheth of Cotton Trade India, an Ahmedabad-based cotton portal. “Exporters are in a soup. They have contracted Gujarat-based varieties like Shankar 6 and are forced to pay a premium as prices in state are ruling higher than those in states like Maharashtra,” he added.
Currently, buyers are paying roughly Rs 3,000 premium per bale (170 kg) for the required quality. Shanker-6 variety has been witnessing high demand from the international yarn producers due to its good mic, staple length as well as strength. Besides, a sophisticated ginning industry in Gujarat supplies goods with a very low contamination. Cotton processed in Gujarat contains 1.5-2% of impurities much lower than the trash content of 3-3.5% elsewhere.
On Thursday, exporters bought cotton at a rate of Rs 44,200-44,500 while Maharashtra rate was lower at Rs 42,500-42,800. Prices made their high of Rs 47,000 during the last week when international market touched its all-time high level. December delivery future at ICE touched a level of 155 cents per lb last week. “There is all chance that exporters would not be able to deliver committed goods as arrivals are low.
Currently, their requirement is one lakh bales per day and arrivals are just half of that,” said Mr Sheth. Arrivals in Gujarat have dropped to just 25,000 bales from the 65,000 bales a week ago. Majority of market yards also closed down their activity till next Sunday. Only three yards Jasdan, Amreli and Vankaner were open on Thursday.
Elsewhere in the country, the arrivals decreased to 1.4 lakh bales from the 2.5 lakh bales last week. “Rain has stopped now and arrivals may return to the normal levels. But quality will be an issue,” said a Rajkot-based ginner. Askash Chapdiya, MD of Rajkot-based Fem Cotton, said, “I don’t see shipment above 32-35 lakh bales by December 15 as ginners are not able to produce quality stocks.
The current arrivals are containing higher moisture levels and so ginners don’t get the required output.” Normally, cotton contains 8-9% moisture but new arrivals contain 13-14% of moisture. “Cotton crop has seen big damage during the last week. Standing crop’s colour also turned yellow,” said BK Kikani, former vice-chancellor of Junagarh Agriculture University.
Source: http://www.infodriveindia.com/Export-Import-News/cotton-exports-to-miss-target-6013.aspx
Thursday, November 25, 2010
Govt sets $24 bn textiles export target for FY11
Press Trust of India / New Delhi November 24, 2010, 18:50 IST
Buoyed by the surge in outward shipments of textiles in recent months, the government today fixed the export target for textiles in FY'11 at $24.4 billion, 9 per cent more than the previous fiscal.
During April-July, 2010, exports of textiles and clothing products, including handicrafts, increased by 11.5 per cent to $7.57 billion from $6.79 billion in the same period last fiscal, according to official estimates.
"The government has set an overall target of $24.48 billion for exports of textiles and clothing products for the current financial year, compared to $22.41 billion in the last fiscal," Minister of Textiles Dayanidhi Maran said after distributing the Shilp Guru Awards and National Awards to master craftspersons and master weavers here.
Talking about the contribution of the handicraft and handloom sectors to economic growth, he said these sectors possess enormous potential to provide gainful employment to a large number of craftspersons and earn valuable foreign exchange through exports.
Both the sectors together provide livelihood to 12 million people and generate foreign exchange worth more than Rs 10,000 crore for the country.Maran said marketing is key to promoting handicraft and handloom items and the sectors need adequate marketing facilities.
"We need to further broaden the existing marketing infrastructure in the country so that artisans and weavers continue to receive continuous opportunities to sell their products throughout the year without having to face patches of lean demand," the minister said.
In the first seven months of the current fiscal, handicraft exports jumped by 24 per cent to $1.07 billion year-on-year, mainly due to a rise in demand from the US market.
On the other hand, handloom exports registered a growth of 63 per cent to$116.76 million in April-July, 2010-11, vis-a-vis the same period last fiscal.
Textiles constituted nearly 13 per cent of India's total exports, valued at $176.5 billion, in 2009-10.
Source: http://www.business-standard.com/india/news/govt-sets-24-bn-textiles-export-target-for-fy11/117087/on
Buoyed by the surge in outward shipments of textiles in recent months, the government today fixed the export target for textiles in FY'11 at $24.4 billion, 9 per cent more than the previous fiscal.
During April-July, 2010, exports of textiles and clothing products, including handicrafts, increased by 11.5 per cent to $7.57 billion from $6.79 billion in the same period last fiscal, according to official estimates.
"The government has set an overall target of $24.48 billion for exports of textiles and clothing products for the current financial year, compared to $22.41 billion in the last fiscal," Minister of Textiles Dayanidhi Maran said after distributing the Shilp Guru Awards and National Awards to master craftspersons and master weavers here.
Talking about the contribution of the handicraft and handloom sectors to economic growth, he said these sectors possess enormous potential to provide gainful employment to a large number of craftspersons and earn valuable foreign exchange through exports.
Both the sectors together provide livelihood to 12 million people and generate foreign exchange worth more than Rs 10,000 crore for the country.Maran said marketing is key to promoting handicraft and handloom items and the sectors need adequate marketing facilities.
"We need to further broaden the existing marketing infrastructure in the country so that artisans and weavers continue to receive continuous opportunities to sell their products throughout the year without having to face patches of lean demand," the minister said.
In the first seven months of the current fiscal, handicraft exports jumped by 24 per cent to $1.07 billion year-on-year, mainly due to a rise in demand from the US market.
On the other hand, handloom exports registered a growth of 63 per cent to$116.76 million in April-July, 2010-11, vis-a-vis the same period last fiscal.
Textiles constituted nearly 13 per cent of India's total exports, valued at $176.5 billion, in 2009-10.
Source: http://www.business-standard.com/india/news/govt-sets-24-bn-textiles-export-target-for-fy11/117087/on
CORRECTED - NY cotton ends at new top, Fed ease to boost mkt
(Corrects cotton hitting record high to second day in a row, instead of third day)
* Tight supply, fund inflows propel cotton futures
* USDA seen lowering China crop estimates next week
* Fed's quanitative easing to spur further cotton surge
(Recasts, updates prices, market activity to U.S. close) By Rene Pastor
NEW YORK, Nov 3 (Reuters) - U.S. cotton futures rose in heavy trading on Wednesday, finishing at a record top for the second straight day as speculative fund buying boosted prices along with strong Chinese cotton prices and tight supplies, analysts said.
Bullish fundamentals lured speculative funds into cotton, up more than 75 percent this year. That is the strongest gain so far in 2010 on the Reuters-Jefferies commodity index, far ahead of the record-setting gold market and wheat futures.
The market is seen getting a further boost over the next few weeks from a decision by the U.S. Federal Reserve to buy $600 billion of government bonds to resuscitate the flagging U.S. economy.
[ID:nN03287174] Also see [MKTS/GLOB] and [FRX/] The ICE Futures U.S. cotton market kept pace with a rally in cotton futures on China's Zhengzhou Commodity Exchange, but eased back from session peaks on mild profit-taking.
"Prices shot to new record highs on the heels of overnight.
"Prices shot to new record highs on the heels of overnight
prices in China and new record highs for the (Cotlook) A Index," said Mike Stevens, an independent cotton analyst in Louisiana.
The benchmark December cotton contract CTZ0 rose 1.26 cents to end at $1.3552 per lb, having hit a new record high for the second straight session at $1.392 per lb. The session low was $1.3321. Under exchange rules, the daily limit will revert back to 5 cents from 6 cents on Wednesday.
Business was heavy. Volume traded reached 65,781 lots, more than 150 percent above the 30-day average at 25,663 lots, Thomson Reuters preliminary data showed. The volume on Wednesday was just below the year high of 67,885 lots set on June 10.
China's benchmark May cotton contract CCFc4 jumped to 29,980 yuan a tonne, setting a record for a third straight day. The contract last traded at 29,715 yuan, up 1.075 yuan. The Cotlook A index cotton price, the combined average of the five cheapest cotton prices in the world plus transport, was quoted at $1.524 on Wednesday, a hefty premium of around 13 cents over New York cotton futures. The A Index normally has a premium of 6 to 8 cents over U.S. cotton prices. It has been running at a premium of 9 to as much as 15 cents during the rally.
Sterling Smith, an analyst for brokerage Country Hedging Inc. in Minnesota, said the decision by the Federal Reserve on quantitative easing would likely keep the greenback under pressure and boost commodities like cotton among others. "All in all, it means more dollars," he said. "The debt's going to expand. It should lead to a weaker dollar."
"In general ... any commodity that has a good fundamental story is going to have legs on this."
"It will be bullish for commodities in general --particularly those that are sensitive like sugar, coffee and
cotton that have supply issues boosting their markets."
Cotton rose more than 20 percent in October and has gained over 90 percent since the rally kicked off in July. "There is a big supply gap at home and abroad," said Yang Guoqi, an analyst with Jinshi Futures in China's largest cotton producing region of Xinjiang.
The market gained more momentum from reports of late rains hitting crop quality in India, the world's No. 2 exporter of the fiber, and expectations the U.S. Agriculture Department may lower China's cotton crop forecast in its monthly supply/demand report due out on Tuesday. "The talk of continuing physical demand, late season rain in Indian cotton fields and speculative exuberance propelled the market higher again," Commonwealth Bank of Australia said in a daily note.
In technical terms, Thomson Reuters analyst Wang Tao said U.S. cotton prices, basis the second-position March contract, could rise to $1.4116 per lb over the next four weeks as part
of a wave pattern. [TECH/C]
The March cotton contract CTH1 increased 2.21 cents to finish at $1.3166 per lb, having hit a lifetime peak of $1.3495.
PRICES AT 3:10 P.M. EDT (1910 GMT)
SETTLE NET PCT LOW HIGH CURRENT
CHNG CHNG VOL
CTZ0 135.52 1.26 0.9% 132.31 139.20 27,582
CTH1 131.66 2.21 1.7% 126.45 134.95 25,101
TOTAL MARKET VOLUME OPEN INTEREST
CURRENT 30D AVG Nov 02 NET CHNG
ICE Cotton 65,781 25,663 243,838 -3,250
(Reporting by Rene Pastorin New York, Naveen Thukral in
Singapore and Niu Shuping in Beijing; Editing by David
Gregorio)
Source: http://www.reuters.com/article/idUSSGE6A205F20101104
* Tight supply, fund inflows propel cotton futures
* USDA seen lowering China crop estimates next week
* Fed's quanitative easing to spur further cotton surge
(Recasts, updates prices, market activity to U.S. close) By Rene Pastor
NEW YORK, Nov 3 (Reuters) - U.S. cotton futures rose in heavy trading on Wednesday, finishing at a record top for the second straight day as speculative fund buying boosted prices along with strong Chinese cotton prices and tight supplies, analysts said.
Bullish fundamentals lured speculative funds into cotton, up more than 75 percent this year. That is the strongest gain so far in 2010 on the Reuters-Jefferies commodity index, far ahead of the record-setting gold market and wheat futures.
The market is seen getting a further boost over the next few weeks from a decision by the U.S. Federal Reserve to buy $600 billion of government bonds to resuscitate the flagging U.S. economy.
[ID:nN03287174] Also see [MKTS/GLOB] and [FRX/] The ICE Futures U.S. cotton market kept pace with a rally in cotton futures on China's Zhengzhou Commodity Exchange, but eased back from session peaks on mild profit-taking.
"Prices shot to new record highs on the heels of overnight.
"Prices shot to new record highs on the heels of overnight
prices in China and new record highs for the (Cotlook) A Index," said Mike Stevens, an independent cotton analyst in Louisiana.
The benchmark December cotton contract CTZ0 rose 1.26 cents to end at $1.3552 per lb, having hit a new record high for the second straight session at $1.392 per lb. The session low was $1.3321. Under exchange rules, the daily limit will revert back to 5 cents from 6 cents on Wednesday.
Business was heavy. Volume traded reached 65,781 lots, more than 150 percent above the 30-day average at 25,663 lots, Thomson Reuters preliminary data showed. The volume on Wednesday was just below the year high of 67,885 lots set on June 10.
China's benchmark May cotton contract CCFc4 jumped to 29,980 yuan a tonne, setting a record for a third straight day. The contract last traded at 29,715 yuan, up 1.075 yuan. The Cotlook A index cotton price, the combined average of the five cheapest cotton prices in the world plus transport, was quoted at $1.524 on Wednesday, a hefty premium of around 13 cents over New York cotton futures. The A Index normally has a premium of 6 to 8 cents over U.S. cotton prices. It has been running at a premium of 9 to as much as 15 cents during the rally.
Sterling Smith, an analyst for brokerage Country Hedging Inc. in Minnesota, said the decision by the Federal Reserve on quantitative easing would likely keep the greenback under pressure and boost commodities like cotton among others. "All in all, it means more dollars," he said. "The debt's going to expand. It should lead to a weaker dollar."
"In general ... any commodity that has a good fundamental story is going to have legs on this."
"It will be bullish for commodities in general --particularly those that are sensitive like sugar, coffee and
cotton that have supply issues boosting their markets."
Cotton rose more than 20 percent in October and has gained over 90 percent since the rally kicked off in July. "There is a big supply gap at home and abroad," said Yang Guoqi, an analyst with Jinshi Futures in China's largest cotton producing region of Xinjiang.
The market gained more momentum from reports of late rains hitting crop quality in India, the world's No. 2 exporter of the fiber, and expectations the U.S. Agriculture Department may lower China's cotton crop forecast in its monthly supply/demand report due out on Tuesday. "The talk of continuing physical demand, late season rain in Indian cotton fields and speculative exuberance propelled the market higher again," Commonwealth Bank of Australia said in a daily note.
In technical terms, Thomson Reuters analyst Wang Tao said U.S. cotton prices, basis the second-position March contract, could rise to $1.4116 per lb over the next four weeks as part
of a wave pattern. [TECH/C]
The March cotton contract CTH1 increased 2.21 cents to finish at $1.3166 per lb, having hit a lifetime peak of $1.3495.
PRICES AT 3:10 P.M. EDT (1910 GMT)
SETTLE NET PCT LOW HIGH CURRENT
CHNG CHNG VOL
CTZ0 135.52 1.26 0.9% 132.31 139.20 27,582
CTH1 131.66 2.21 1.7% 126.45 134.95 25,101
TOTAL MARKET VOLUME OPEN INTEREST
CURRENT 30D AVG Nov 02 NET CHNG
ICE Cotton 65,781 25,663 243,838 -3,250
(Reporting by Rene Pastorin New York, Naveen Thukral in
Singapore and Niu Shuping in Beijing; Editing by David
Gregorio)
Source: http://www.reuters.com/article/idUSSGE6A205F20101104
U.S. Loses Cotton Subsidy Appeal at WTO By REUTERS
GENEVA/WASHINGTON (Reuters) - The United States lost an appeal on Monday in its long-running dispute with Brazil over U.S. subsidies for cotton farmers at the World Trade Organization (WTO).
The ruling opens the way for Brazil to seek WTO approval for more than $1 billion a year in sanctions on U.S. imports, which it has suggested it could impose on services or by suspending U.S. intellectual property rights.
In a 184-page ruling, the appeal body, the WTO's top court, recommended that the WTO's dispute settlement body should request the United States to bring its measures into line with international trade rules.
The appeal body backed findings on almost all counts, issued in December last year by another dispute panel, that the United States had not complied with earlier rulings in the case brought by Brazil in 2002.
Last December's compliance ruling confirmed that U.S. marketing loan and counter-cyclical payments had led to an increase in U.S. production and exports of cotton that depressed world prices.
Washington had appealed the ruling, arguing that changes to its farm programs had brought them into line with WTO rules.
The Bush administration on Monday said it was "very disappointed" by the new ruling, suggesting that higher cotton prices made the case irrelevant.
"The United States has not been, and is not, making any payments tied to cotton production. Therefore, there is no basis to say that U.S. payments are today having any impact on cotton prices," Sean Spicer, a spokesman for U.S. Trade Representative Susan Schwab, said in a statement.
U.S. cotton subsidies have become one of the most contentious issues in the WTO's Doha trade talks, which seek to expand world trade and give a leg-up to developing countries.
Developing country producers, especially in Africa, believe the U.S. subsidies depress prices and squeeze their own poor farmers out of the market.
African producers are calling for an 82 percent cut in the round to U.S. trade-distorting cotton subsidies -- bigger than the 66-73 percent proposed for other U.S. farm supports.
Washington has yet to file a counterproposal, but there is strong political backing across Southern states for continued support for the politically influential industry.
The U.S. government paid cotton farmers $2 billion to $4 billion in trade-distorting subsidies in most recent years.But price-linked subsidies have fallen in step with higher cotton prices, which have risen over the past year due mainly to lower cotton sowings and expectations that world cotton demand will increase at a steady cadence.
Based on the spot price of cotton futures in New York, fiber contracts were trading around 46 cents a lb in May 2007. They hit a 12-year top over 90 cents in March and closed last Friday at 65.74 cents.
The U.S. cotton industry said the ruling was "out of date and out of touch with existing market conditions."
"It is simply not the case that world cotton prices are currently suppressed or were ever suppressed," the National Cotton Council said in a statement.
The Memphis-based group also noted that one trigger for subsidies, the cotton target price, had been lowered in the 2008 U.S. farm law enacted in late May.
The new farm law sets the target price for upland cotton at 71.25 cents per lb from 2008, down slightly from the earlier level of 72.4 cents per lb.
But the new law also introduces an incentive of 4 cents a lb for cotton mills, which critics complain is merely a revival of a subsidy eliminated after Brazil's earlier WTO victory.
Source: http://www.afma.org/F-Info/More_News/Cotton-060308.htm
The ruling opens the way for Brazil to seek WTO approval for more than $1 billion a year in sanctions on U.S. imports, which it has suggested it could impose on services or by suspending U.S. intellectual property rights.
In a 184-page ruling, the appeal body, the WTO's top court, recommended that the WTO's dispute settlement body should request the United States to bring its measures into line with international trade rules.
The appeal body backed findings on almost all counts, issued in December last year by another dispute panel, that the United States had not complied with earlier rulings in the case brought by Brazil in 2002.
Last December's compliance ruling confirmed that U.S. marketing loan and counter-cyclical payments had led to an increase in U.S. production and exports of cotton that depressed world prices.
Washington had appealed the ruling, arguing that changes to its farm programs had brought them into line with WTO rules.
The Bush administration on Monday said it was "very disappointed" by the new ruling, suggesting that higher cotton prices made the case irrelevant.
"The United States has not been, and is not, making any payments tied to cotton production. Therefore, there is no basis to say that U.S. payments are today having any impact on cotton prices," Sean Spicer, a spokesman for U.S. Trade Representative Susan Schwab, said in a statement.
U.S. cotton subsidies have become one of the most contentious issues in the WTO's Doha trade talks, which seek to expand world trade and give a leg-up to developing countries.
Developing country producers, especially in Africa, believe the U.S. subsidies depress prices and squeeze their own poor farmers out of the market.
African producers are calling for an 82 percent cut in the round to U.S. trade-distorting cotton subsidies -- bigger than the 66-73 percent proposed for other U.S. farm supports.
Washington has yet to file a counterproposal, but there is strong political backing across Southern states for continued support for the politically influential industry.
The U.S. government paid cotton farmers $2 billion to $4 billion in trade-distorting subsidies in most recent years.But price-linked subsidies have fallen in step with higher cotton prices, which have risen over the past year due mainly to lower cotton sowings and expectations that world cotton demand will increase at a steady cadence.
Based on the spot price of cotton futures in New York, fiber contracts were trading around 46 cents a lb in May 2007. They hit a 12-year top over 90 cents in March and closed last Friday at 65.74 cents.
The U.S. cotton industry said the ruling was "out of date and out of touch with existing market conditions."
"It is simply not the case that world cotton prices are currently suppressed or were ever suppressed," the National Cotton Council said in a statement.
The Memphis-based group also noted that one trigger for subsidies, the cotton target price, had been lowered in the 2008 U.S. farm law enacted in late May.
The new farm law sets the target price for upland cotton at 71.25 cents per lb from 2008, down slightly from the earlier level of 72.4 cents per lb.
But the new law also introduces an incentive of 4 cents a lb for cotton mills, which critics complain is merely a revival of a subsidy eliminated after Brazil's earlier WTO victory.
Source: http://www.afma.org/F-Info/More_News/Cotton-060308.htm
Organic cotton demand outstrips supply – Mr Mahesh, Arvind Ltd
One more informative session at the International Denim Conference, which caught the attention of the stakeholders and industry leaders of the textile sector and the denim industry in particular and kept them captivated, was the presentation by Mr Mahesh Ramakrishnan, Head – Agribusiness at Arvind Limited on ‘Organic cotton & denim’.
Cotton is produced in more than 65 countries worldwide and represents over 2.4 percent of global arable land, involving about 30 million farmers and considering that almost one kilogram of hazardous pesticides is sprayed for every hectare under cotton, cotton consumes, 16% of global insecticide releases – more than any other single crop, Mahesh said.
In 2009-10, India produced 29.5 million cotton bales (1 bale = 170 kg lint) and is home to over one third of the world’s cotton farmers and cotton also accounts for 54 percent of all pesticides used annually – despite occupying just 5 percent of all land under cultivation, he further divulged.
On the other side of the cotton spectrum, organic cotton production which is pesticide free, offers a strong alternative to current production methods, along with which, purchasing decisions made by consumers have the ability to directly impact production methods and thereby both environmental security and social equity. Consumer demand for organic cotton currently stands at between US $3-4 billion, and is growing rapidly, such that demand currently outstrips supply.
The key factors driving organic market development include consumer interest in ‘green’ products, significant expansion of existing organic cotton programs by brands and retailers, like Marks & Spencer, Woolworth, Wal-Mart, C&A and Carrefour.
Global retail sales of organic cotton products have been ascending at a growth rate of more than 35 percent in the last few years, having grown from a mere US $245 million in 2001 to $1.966 billion in 2007 and by touching a staggering $4.3 billion in 2009. As per OE surveys, in 2009, C&A (Belgium), Nike Inc and Wal-Mart (both from USA) are the top three organic cotton consuming retailers globally.
In 2009, 22 countries grew organic cotton and the global total acreage stood at approximately 625,000 acres, sown by around 220,000 farmers and in total produced around 175,113 tons (802,599 bales) and which represents 0.76 percent of overall cotton production. India remains the largest organic cotton fiber producer in the world with an output of 107,510 tons representing 61.41 percent of world organic output.
He continued by saying that, denim is the single largest consumer of cotton accounting for around 17 percent of global cotton consumption.
The he informed about Arvind’s organic cotton program and also its initiative in organic denim. Arvind started organic denim production in 2007, producing one million meters and today it produces eight million meters a year, which is 8 percent of its total production. Wal-Mart, Patagonia, H&M, C&A, Timberland, etc are the major supporters of Arvind’s organic denim initiative.
Arvind’s organic cotton contract farming project is located in the cotton growing belt district of Maharashtra; Akola. From just 2 talukas, 33 villages, 293 farmers and 1,355 acres of cotton acreage in 2007-08 it has now enlarged to 6 talukas, 132 villages, 4,000 farmers and cotton under cultivation, has also surged around 12 times to 16,500 acres.
Fibre2fashion News Desk - India
Source: http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=92606
Cotton is produced in more than 65 countries worldwide and represents over 2.4 percent of global arable land, involving about 30 million farmers and considering that almost one kilogram of hazardous pesticides is sprayed for every hectare under cotton, cotton consumes, 16% of global insecticide releases – more than any other single crop, Mahesh said.
In 2009-10, India produced 29.5 million cotton bales (1 bale = 170 kg lint) and is home to over one third of the world’s cotton farmers and cotton also accounts for 54 percent of all pesticides used annually – despite occupying just 5 percent of all land under cultivation, he further divulged.
On the other side of the cotton spectrum, organic cotton production which is pesticide free, offers a strong alternative to current production methods, along with which, purchasing decisions made by consumers have the ability to directly impact production methods and thereby both environmental security and social equity. Consumer demand for organic cotton currently stands at between US $3-4 billion, and is growing rapidly, such that demand currently outstrips supply.
The key factors driving organic market development include consumer interest in ‘green’ products, significant expansion of existing organic cotton programs by brands and retailers, like Marks & Spencer, Woolworth, Wal-Mart, C&A and Carrefour.
Global retail sales of organic cotton products have been ascending at a growth rate of more than 35 percent in the last few years, having grown from a mere US $245 million in 2001 to $1.966 billion in 2007 and by touching a staggering $4.3 billion in 2009. As per OE surveys, in 2009, C&A (Belgium), Nike Inc and Wal-Mart (both from USA) are the top three organic cotton consuming retailers globally.
In 2009, 22 countries grew organic cotton and the global total acreage stood at approximately 625,000 acres, sown by around 220,000 farmers and in total produced around 175,113 tons (802,599 bales) and which represents 0.76 percent of overall cotton production. India remains the largest organic cotton fiber producer in the world with an output of 107,510 tons representing 61.41 percent of world organic output.
He continued by saying that, denim is the single largest consumer of cotton accounting for around 17 percent of global cotton consumption.
The he informed about Arvind’s organic cotton program and also its initiative in organic denim. Arvind started organic denim production in 2007, producing one million meters and today it produces eight million meters a year, which is 8 percent of its total production. Wal-Mart, Patagonia, H&M, C&A, Timberland, etc are the major supporters of Arvind’s organic denim initiative.
Arvind’s organic cotton contract farming project is located in the cotton growing belt district of Maharashtra; Akola. From just 2 talukas, 33 villages, 293 farmers and 1,355 acres of cotton acreage in 2007-08 it has now enlarged to 6 talukas, 132 villages, 4,000 farmers and cotton under cultivation, has also surged around 12 times to 16,500 acres.
Fibre2fashion News Desk - India
Source: http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=92606
India:Organic cotton demand outstrips supply – Mr Mahesh, Arvind Ltd
One more informative session at the International Denim Conference, which caught the attention of the stakeholders and industry leaders of the textile sector and the denim industry in particular and kept them captivated, was the presentation by Mr Mahesh Ramakrishnan, Head – Agribusiness at Arvind Limited on ‘Organic cotton & denim’.
Cotton is produced in more than 65 countries worldwide and represents over 2.4 percent of global arable land, involving about 30 million farmers and considering that almost one kilogram of hazardous pesticides is sprayed for every hectare under cotton, cotton consumes, 16% of global insecticide releases – more than any other single crop, Mahesh said.
In 2009-10, India produced 29.5 million cotton bales (1 bale = 170 kg lint) and is home to over one third of the world’s cotton farmers and cotton also accounts for 54 percent of all pesticides used annually – despite occupying just 5 percent of all land under cultivation, he further divulged.
On the other side of the cotton spectrum, organic cotton production which is pesticide free, offers a strong alternative to current production methods, along with which, purchasing decisions made by consumers have the ability to directly impact production methods and thereby both environmental security and social equity. Consumer demand for organic cotton currently stands at between US $3-4 billion, and is growing rapidly, such that demand currently outstrips supply.
The key factors driving organic market development include consumer interest in ‘green’ products, significant expansion of existing organic cotton programs by brands and retailers, like Marks & Spencer, Woolworth, Wal-Mart, C&A and Carrefour.
Global retail sales of organic cotton products have been ascending at a growth rate of more than 35 percent in the last few years, having grown from a mere US $245 million in 2001 to $1.966 billion in 2007 and by touching a staggering $4.3 billion in 2009. As per OE surveys, in 2009, C&A (Belgium), Nike Inc and Wal-Mart (both from USA) are the top three organic cotton consuming retailers globally.
In 2009, 22 countries grew organic cotton and the global total acreage stood at approximately 625,000 acres, sown by around 220,000 farmers and in total produced around 175,113 tons (802,599 bales) and which represents 0.76 percent of overall cotton production. India remains the largest organic cotton fiber producer in the world with an output of 107,510 tons representing 61.41 percent of world organic output.
He continued by saying that, denim is the single largest consumer of cotton accounting for around 17 percent of global cotton consumption.
The he informed about Arvind’s organic cotton program and also its initiative in organic denim. Arvind started organic denim production in 2007, producing one million meters and today it produces eight million meters a year, which is 8 percent of its total production. Wal-Mart, Patagonia, H&M, C&A, Timberland, etc are the major supporters of Arvind’s organic denim initiative.
Arvind’s organic cotton contract farming project is located in the cotton growing belt district of Maharashtra; Akola. From just 2 talukas, 33 villages, 293 farmers and 1,355 acres of cotton acreage in 2007-08 it has now enlarged to 6 talukas, 132 villages, 4,000 farmers and cotton under cultivation, has also surged around 12 times to 16,500 acres.
Source: http://www.textileglobal.com/2010/11/indiaorganic-cotton-demand-outstrips-supply-%E2%80%93-mr-mahesh-arvind-ltd.html
Cotton is produced in more than 65 countries worldwide and represents over 2.4 percent of global arable land, involving about 30 million farmers and considering that almost one kilogram of hazardous pesticides is sprayed for every hectare under cotton, cotton consumes, 16% of global insecticide releases – more than any other single crop, Mahesh said.
In 2009-10, India produced 29.5 million cotton bales (1 bale = 170 kg lint) and is home to over one third of the world’s cotton farmers and cotton also accounts for 54 percent of all pesticides used annually – despite occupying just 5 percent of all land under cultivation, he further divulged.
On the other side of the cotton spectrum, organic cotton production which is pesticide free, offers a strong alternative to current production methods, along with which, purchasing decisions made by consumers have the ability to directly impact production methods and thereby both environmental security and social equity. Consumer demand for organic cotton currently stands at between US $3-4 billion, and is growing rapidly, such that demand currently outstrips supply.
The key factors driving organic market development include consumer interest in ‘green’ products, significant expansion of existing organic cotton programs by brands and retailers, like Marks & Spencer, Woolworth, Wal-Mart, C&A and Carrefour.
Global retail sales of organic cotton products have been ascending at a growth rate of more than 35 percent in the last few years, having grown from a mere US $245 million in 2001 to $1.966 billion in 2007 and by touching a staggering $4.3 billion in 2009. As per OE surveys, in 2009, C&A (Belgium), Nike Inc and Wal-Mart (both from USA) are the top three organic cotton consuming retailers globally.
In 2009, 22 countries grew organic cotton and the global total acreage stood at approximately 625,000 acres, sown by around 220,000 farmers and in total produced around 175,113 tons (802,599 bales) and which represents 0.76 percent of overall cotton production. India remains the largest organic cotton fiber producer in the world with an output of 107,510 tons representing 61.41 percent of world organic output.
He continued by saying that, denim is the single largest consumer of cotton accounting for around 17 percent of global cotton consumption.
The he informed about Arvind’s organic cotton program and also its initiative in organic denim. Arvind started organic denim production in 2007, producing one million meters and today it produces eight million meters a year, which is 8 percent of its total production. Wal-Mart, Patagonia, H&M, C&A, Timberland, etc are the major supporters of Arvind’s organic denim initiative.
Arvind’s organic cotton contract farming project is located in the cotton growing belt district of Maharashtra; Akola. From just 2 talukas, 33 villages, 293 farmers and 1,355 acres of cotton acreage in 2007-08 it has now enlarged to 6 talukas, 132 villages, 4,000 farmers and cotton under cultivation, has also surged around 12 times to 16,500 acres.
Source: http://www.textileglobal.com/2010/11/indiaorganic-cotton-demand-outstrips-supply-%E2%80%93-mr-mahesh-arvind-ltd.html
Wednesday, November 24, 2010
Cotton price plunge accelerates as dollar soarsCotton price plunge accelerates as dollar soars
Cotton's losses accelerated on Tuesday as a soaring dollar added to fears for Chinese demand in persuading funds to leave, while producers rushed to make the most of prices which remain high by historical standards.
New York's near-term December lot, freed from limits on daily moves by entry into the expiry process, plunged 9.1% to 110.85 cents a pound, its lowest for more than a month.
At that level, the contract was down nearly 30% from the record high for a near-term cotton lot set nine trading sessions ago.
The March contract fell 6.0 cents, the maximum allowed by the exchange, to 111.79 cents a pound. A close at that level would represent a third successive limit-down finish.
'Bit of an unknown'
Many commodities struggled on Tuesday, as the dollar soared 1.2% against a basket of currencies, undermined by lingering eurozone debt fears and the outbreak of hostilities between North and South Korea.
A stronger dollar, viewed as a safe haven by investors, makes assets denominated in it less competitive to buyers in other currencies.
Cotton's particular fall was attributed to its exposure to China, the biggest consumer, importer and grower of the fibre, which on Monday restated its determination to clampdown on soaring farm commodity inflation
.
The China Banking Regulatory Commission said it would crack down on use of loans for activities such as speculation and hoarding which can artificially inflate crop prices.
"China, and how they will react, is a bit of an unknown. Funds aren't waiting around to find out more," a London analyst told Agrimoney.com.
Reasons to sell
Furthermore, US Department of Agriculture data released late on Monday showed the proportion of cotton harvested hitting 86%.
"While this year's cotton harvest in China is behind schedule, the crop progress report... shows that the harvest in the US is still progressing faster than the average for past years," Commerzbank said.
At Hightower Report, Terry Roggensack said he was hearing that the crop in Texas, America's top cotton-producing state, was "in good shape".
Meanwhile, producers were accelerating to take advantage of prices which, even if well past their peak, were high by historical standards, and up more than 50% over the past year.
And technically, the crop was weak too, with the March contract falling through a key support level at 112.75 cents a pound, the 50% retracement level of the rally, "as if it wasn't there".
Cotton vs sugar
The decline in cotton is significantly faster than sugar's correction from a 29-year high reached in February, when a better-than-expected Indian crop, and the release of European stocks, sent funds fleeing.
Mr Roggensack questioned whether cotton would be able to achieve the same rebound achieved by sugar, which earlier this month set a fresh 29-year top.
"The southern hemisphere looks like having good production. A lot of traders are saying there will be plenty of cotton all over the world next year," he told Agrimoney.com.
"That is different from sugar. There would more reason to buy sugar on the break at the moment".
Source : http://www.agrimoney.com/news/cotton-price-plunge-accelerates-as-dollar-soars--2521.html
New York's near-term December lot, freed from limits on daily moves by entry into the expiry process, plunged 9.1% to 110.85 cents a pound, its lowest for more than a month.
At that level, the contract was down nearly 30% from the record high for a near-term cotton lot set nine trading sessions ago.
The March contract fell 6.0 cents, the maximum allowed by the exchange, to 111.79 cents a pound. A close at that level would represent a third successive limit-down finish.
'Bit of an unknown'
Many commodities struggled on Tuesday, as the dollar soared 1.2% against a basket of currencies, undermined by lingering eurozone debt fears and the outbreak of hostilities between North and South Korea.
A stronger dollar, viewed as a safe haven by investors, makes assets denominated in it less competitive to buyers in other currencies.
Cotton's particular fall was attributed to its exposure to China, the biggest consumer, importer and grower of the fibre, which on Monday restated its determination to clampdown on soaring farm commodity inflation
.
The China Banking Regulatory Commission said it would crack down on use of loans for activities such as speculation and hoarding which can artificially inflate crop prices.
"China, and how they will react, is a bit of an unknown. Funds aren't waiting around to find out more," a London analyst told Agrimoney.com.
Reasons to sell
Furthermore, US Department of Agriculture data released late on Monday showed the proportion of cotton harvested hitting 86%.
"While this year's cotton harvest in China is behind schedule, the crop progress report... shows that the harvest in the US is still progressing faster than the average for past years," Commerzbank said.
At Hightower Report, Terry Roggensack said he was hearing that the crop in Texas, America's top cotton-producing state, was "in good shape".
Meanwhile, producers were accelerating to take advantage of prices which, even if well past their peak, were high by historical standards, and up more than 50% over the past year.
And technically, the crop was weak too, with the March contract falling through a key support level at 112.75 cents a pound, the 50% retracement level of the rally, "as if it wasn't there".
Cotton vs sugar
The decline in cotton is significantly faster than sugar's correction from a 29-year high reached in February, when a better-than-expected Indian crop, and the release of European stocks, sent funds fleeing.
Mr Roggensack questioned whether cotton would be able to achieve the same rebound achieved by sugar, which earlier this month set a fresh 29-year top.
"The southern hemisphere looks like having good production. A lot of traders are saying there will be plenty of cotton all over the world next year," he told Agrimoney.com.
"That is different from sugar. There would more reason to buy sugar on the break at the moment".
Source : http://www.agrimoney.com/news/cotton-price-plunge-accelerates-as-dollar-soars--2521.html
Cotton Spinning Industry Reports Continued Growth (Part B)
2010-11-23
According to data collected from 11,934 statistics-worthy Chinese cotton spinning enterprises surveyed by National Bureau of Statistics of China, total industrial production value of the industry increased 27.39 percent y/y to CNY791.811 billion in Jan.-Aug. 2010 ; The value of goods delivered amounted to $63.016 billion, up 29.11 per cent y/y, 2.57 percentage points lower than the Jan.-Aug. 2009 period; The main business income increased by 29.06 per cent to 776.893 billion yuan; Meanwhile, statistics-worthy cotton spinning enterprises have finished the sales production value CNY 777.2 billion, up 27.95% y/y.
Profits
From Jan. to Aug. 2010, profits of main business of the industry jumped 35.98 per cent to 80.668 billion yuan; total profits surged 66.45 per cent to 37.015 billion yuan. In Aug., enterprises in the cotton spinning sector saw their ratio of profit edged up by 0.14% to 4.76%, exceeding to its pre-crisis highest level. The growth was attributed to an increase in domestic sales and market confidence.
Investment
From Jan. to Aug. 2010, China has made an investment of 57.33 billion yuan in cotton spinning and chemical fibre industry, up by 15.08 percent over the same period last year. Cotton spinning industry registered new projects totaling 1303, down 1.7% than that of the Jan.-Aug. 2009 period, according to the Statistics Center of CNTAC.
As long noted, China's robust manufacturing output was largely being achieved through strong productivity of developed eastern provinces. However, over the past couple of years, China has been fastening its grand western development program, to boost the development of the middle and western land. In 2010, although eastern provinces' investment increased, it did so at a much slower rate than the middle and western provinces. Investment realization of Henan, China's biggest province in terms of investment value, totaled CNY10.07 billion in Jan.-Aug.
Prices of materials and yarn
Materials:
With manufacturing slowly recovering amid improving economic conditions, cotton demand has increased prompting more orders among mills. However, with a deficient supply of cotton in the market, prices extend gains since Oct. 2009. China Cotton Index for 328-grade cotton reached at 21890 yuan/ton.
Cotton prices have been spurred in part by a disappointing Chinese harvest, the world's biggest, held back by rainy weather which set back maturity, and quality, in crops particularly in Henan and Shandong in the east of the country. As of mid-October, 40% of the national crop had been harvested, compared with 60% by then in a typical year. Meanwhile, stocks in the US, the top producer, have been run down as lower prices late in the last decade prompted farmers to switch to grains. The USDA on Tuesday cut its estimate for American inventories at the end of 2010-11 to 2.2m bales, the lowest since 1925.
As more and more cotton mills were begging the government to sell state reserve cotton by auction, as well as to give them import quotas for cotton as soon as possible. Accordingly, the government begun to release 600,000 tons of cotton reserves since Aug. 10 2010.
On November 5, 2010, the A-Index hits 160 and the ICE Index rose to 142.3 cents per pound, which are new records for both indices. The International Cotton Advisory Committee (ICAC) reported that the Cotlook A Index averaged 127 cents per pound in October, 21 per cent more than in the previous month and 89 per cent higher than in October 2009.
Chart 4. China Cotton Index for 328-Grade vs the price with 1% tariff vs the price with slippery value tax in Jan. - Sep. 2010
In a good selling situation, viscose and terylene staple fiber prices still keep rising along with cotton prices. During Jan.-May 2010, the average price for viscose staple fibre in China was CNY 3000/ton higher than 328-grade cotton. In Sep. 2010, the average price for viscose staple fibre in China was CNY 400/ton lower than 328-grade cotton. For terylene staple fiber, during Jan.-May 2010, the average price for terylene staple fiber in China was CNY 5000/ton lower than 328-grade cotton. After June, the average price for terylene staple fiber in China was CNY 8000/ton lower than 328-grade cotton.
Cotton yarn & fabric:
As China was experiencing a rising prices of cotton, cotton yarn prices also have increased for different varieties of yarn, the increase occurred since the beginning of the year. Since October 8th, 20s cotton yarn had been at 30,500 yuan/ton and 32s cotton yarn at 31,500 yuan/ton, and both rose to 31,500 yuan and 32,800 yuan respectively on October 18th. Rayon staple fiber (1.67 dtex/38 mm) continued to increase, and rose by 600 yuan on October 18th to 22,500 yuan/ton on October 18th. Spandex (44 dtex) increased by 500 yuan to 56,000 yuan/ton. The impact of soaring prices of cotton had bad influence, because small mills have not enough material inventories and do not dare accept long-term and large-scale orders.
Grey fabric prices remain stable in the beginning two months of 2010, and jumped in March. The uptrend in grey fabric prices continued for much of the May, with prices moving to an elevated trading range. While the broader cotton market has turned more supportive and sentiment more positive, after Sep.5, concerns of further price hikes of cotton yarns in China have weighed on grey fabric prices day by day.
source: http://www.texindex.com/News/Detail/5116.html
According to data collected from 11,934 statistics-worthy Chinese cotton spinning enterprises surveyed by National Bureau of Statistics of China, total industrial production value of the industry increased 27.39 percent y/y to CNY791.811 billion in Jan.-Aug. 2010 ; The value of goods delivered amounted to $63.016 billion, up 29.11 per cent y/y, 2.57 percentage points lower than the Jan.-Aug. 2009 period; The main business income increased by 29.06 per cent to 776.893 billion yuan; Meanwhile, statistics-worthy cotton spinning enterprises have finished the sales production value CNY 777.2 billion, up 27.95% y/y.
Profits
From Jan. to Aug. 2010, profits of main business of the industry jumped 35.98 per cent to 80.668 billion yuan; total profits surged 66.45 per cent to 37.015 billion yuan. In Aug., enterprises in the cotton spinning sector saw their ratio of profit edged up by 0.14% to 4.76%, exceeding to its pre-crisis highest level. The growth was attributed to an increase in domestic sales and market confidence.
Investment
From Jan. to Aug. 2010, China has made an investment of 57.33 billion yuan in cotton spinning and chemical fibre industry, up by 15.08 percent over the same period last year. Cotton spinning industry registered new projects totaling 1303, down 1.7% than that of the Jan.-Aug. 2009 period, according to the Statistics Center of CNTAC.
As long noted, China's robust manufacturing output was largely being achieved through strong productivity of developed eastern provinces. However, over the past couple of years, China has been fastening its grand western development program, to boost the development of the middle and western land. In 2010, although eastern provinces' investment increased, it did so at a much slower rate than the middle and western provinces. Investment realization of Henan, China's biggest province in terms of investment value, totaled CNY10.07 billion in Jan.-Aug.
Prices of materials and yarn
Materials:
With manufacturing slowly recovering amid improving economic conditions, cotton demand has increased prompting more orders among mills. However, with a deficient supply of cotton in the market, prices extend gains since Oct. 2009. China Cotton Index for 328-grade cotton reached at 21890 yuan/ton.
Cotton prices have been spurred in part by a disappointing Chinese harvest, the world's biggest, held back by rainy weather which set back maturity, and quality, in crops particularly in Henan and Shandong in the east of the country. As of mid-October, 40% of the national crop had been harvested, compared with 60% by then in a typical year. Meanwhile, stocks in the US, the top producer, have been run down as lower prices late in the last decade prompted farmers to switch to grains. The USDA on Tuesday cut its estimate for American inventories at the end of 2010-11 to 2.2m bales, the lowest since 1925.
As more and more cotton mills were begging the government to sell state reserve cotton by auction, as well as to give them import quotas for cotton as soon as possible. Accordingly, the government begun to release 600,000 tons of cotton reserves since Aug. 10 2010.
On November 5, 2010, the A-Index hits 160 and the ICE Index rose to 142.3 cents per pound, which are new records for both indices. The International Cotton Advisory Committee (ICAC) reported that the Cotlook A Index averaged 127 cents per pound in October, 21 per cent more than in the previous month and 89 per cent higher than in October 2009.
Chart 4. China Cotton Index for 328-Grade vs the price with 1% tariff vs the price with slippery value tax in Jan. - Sep. 2010
In a good selling situation, viscose and terylene staple fiber prices still keep rising along with cotton prices. During Jan.-May 2010, the average price for viscose staple fibre in China was CNY 3000/ton higher than 328-grade cotton. In Sep. 2010, the average price for viscose staple fibre in China was CNY 400/ton lower than 328-grade cotton. For terylene staple fiber, during Jan.-May 2010, the average price for terylene staple fiber in China was CNY 5000/ton lower than 328-grade cotton. After June, the average price for terylene staple fiber in China was CNY 8000/ton lower than 328-grade cotton.
Cotton yarn & fabric:
As China was experiencing a rising prices of cotton, cotton yarn prices also have increased for different varieties of yarn, the increase occurred since the beginning of the year. Since October 8th, 20s cotton yarn had been at 30,500 yuan/ton and 32s cotton yarn at 31,500 yuan/ton, and both rose to 31,500 yuan and 32,800 yuan respectively on October 18th. Rayon staple fiber (1.67 dtex/38 mm) continued to increase, and rose by 600 yuan on October 18th to 22,500 yuan/ton on October 18th. Spandex (44 dtex) increased by 500 yuan to 56,000 yuan/ton. The impact of soaring prices of cotton had bad influence, because small mills have not enough material inventories and do not dare accept long-term and large-scale orders.
Grey fabric prices remain stable in the beginning two months of 2010, and jumped in March. The uptrend in grey fabric prices continued for much of the May, with prices moving to an elevated trading range. While the broader cotton market has turned more supportive and sentiment more positive, after Sep.5, concerns of further price hikes of cotton yarns in China have weighed on grey fabric prices day by day.
source: http://www.texindex.com/News/Detail/5116.html
Monday, November 15, 2010
Chinese Textile Exporters Struggle
Exporters of textiles at the Canton Fair say they are struggling to survive amid rising raw material and labor costs.
“Wages have increased as much as 30%. But several of our partner plants have stopped production because of the worker shortage,” said Chen Su, the assistant to the general manager at Sunvim Group, China’s biggest home textile company, Thursday.
In addition, prices of raw materials are rising rapidly. Cotton prices have risen from 18,160 Yuan (US$2,720) to 27,405 Yuan per tonne, a 51% increase. The prices of other fabrics are also rising. Furthermore, labor and raw material shortages often hampers the production of textile plants, leading to delivery delays, one of the greatest concerns for buyers.
Elliot Gessle, a British buyer at the Canton Fair, thinks Chinese textile products have lost their competitiveness. “Prices of most products are rising. But delivery delays have been the greatest headache,” he said. China’s textile industry is facing competition from other Asian countries with low labor costs. “Quality and efficiency in those countries are improving. They will catch up with China some day,” said Gessle, who also purchases from Laos and Cambodia. China exported US$149.8B of textile products in the 1st 9 months of the yr, a Year-on-Year growth rate of 23.14%. But exporters say the numbers are misleading.
The numbers are growing only because buyers are making bulk orders, said Luo Ping’an, the deputy general manager of Anhui Garments Import and Export Co. “In the past, buyers ordered goods of 1 or 2 months of demand. But now they buy half a year’s goods in one order.” Luo said buyers are making larger orders as they expect prices to rise and they want to avoid delays in delivery.
Chinese textile companies must focus on innovation and branding to address the many challenges they are facing, said Huang Yuefeng, an official with China’s Ministry of Commerce.Guangzhou-based Nandadi Garment Co. succeeded by putting traditional embroidery on jeans. It established its own brand, Vigoss in the United States, said a company representative surnamed Wu at the Canton Fair. “We have opened thousands of stores abroad, significantly increasing revenue and awareness of the brand,” Wu said.
The crisis is an opportunity for the competitive companies who will survive after small and medium-sized companies are forced out of the market, experts say.
—Paul A. Ebeling, Jnr. www.livetradingnews.com
“Wages have increased as much as 30%. But several of our partner plants have stopped production because of the worker shortage,” said Chen Su, the assistant to the general manager at Sunvim Group, China’s biggest home textile company, Thursday.
In addition, prices of raw materials are rising rapidly. Cotton prices have risen from 18,160 Yuan (US$2,720) to 27,405 Yuan per tonne, a 51% increase. The prices of other fabrics are also rising. Furthermore, labor and raw material shortages often hampers the production of textile plants, leading to delivery delays, one of the greatest concerns for buyers.
Elliot Gessle, a British buyer at the Canton Fair, thinks Chinese textile products have lost their competitiveness. “Prices of most products are rising. But delivery delays have been the greatest headache,” he said. China’s textile industry is facing competition from other Asian countries with low labor costs. “Quality and efficiency in those countries are improving. They will catch up with China some day,” said Gessle, who also purchases from Laos and Cambodia. China exported US$149.8B of textile products in the 1st 9 months of the yr, a Year-on-Year growth rate of 23.14%. But exporters say the numbers are misleading.
The numbers are growing only because buyers are making bulk orders, said Luo Ping’an, the deputy general manager of Anhui Garments Import and Export Co. “In the past, buyers ordered goods of 1 or 2 months of demand. But now they buy half a year’s goods in one order.” Luo said buyers are making larger orders as they expect prices to rise and they want to avoid delays in delivery.
Chinese textile companies must focus on innovation and branding to address the many challenges they are facing, said Huang Yuefeng, an official with China’s Ministry of Commerce.Guangzhou-based Nandadi Garment Co. succeeded by putting traditional embroidery on jeans. It established its own brand, Vigoss in the United States, said a company representative surnamed Wu at the Canton Fair. “We have opened thousands of stores abroad, significantly increasing revenue and awareness of the brand,” Wu said.
The crisis is an opportunity for the competitive companies who will survive after small and medium-sized companies are forced out of the market, experts say.
—Paul A. Ebeling, Jnr. www.livetradingnews.com
Source: http://www.livetradingnews.com/chinese-textile-exporters-struggle-26891.htm
Saturday, November 6, 2010
Alok Industries to cut debt-equity ratio- Rajas Kelkar,ET Bureau
5 Nov, 2010, 03.04AM IST
MUMBAI: Alok Industries, a listed textile-to-retail company, expects to bring down its debt-equity ratio of 1.81 over the next couple of years by generating higher profits and selling part of the real estate business.
Alok Industries CFO Sunil Khandelwal said that the total value of the real estate portfolio, held in step-down subsidiary, is Rs 2,200 crore. The company expects to receive at least Rs 1,500 crore by March 2012 end. “We have 6,40,000 sq ft of commercial real estate held in step-down subsidiaries,” he added.
Alok Industries primarily makes textiles and owns retail stores in India and the UK. The company operates 260 stores called ‘H&A’ in India. Mr Khandelwal said that the company was looking to raise private equity for the retail business two years ago.
“We are looking to expand to 400 stores by March 2011 end. We will look at value unlocking in the retail business only when we reach 700 to 800 stories over the next couple of years,” he added. Mr Khandelwal said that the company follows a franchisee model.
In case of the UK stores, Alok could consider exiting the business, he said. UK retail stores ‘Store twenty one’ are expected to make profits this year. “The idea was to push Alok Industries products. However, these stores no longer sell any significant Alok Industries products,” he added.
While he did not specify any time line for selling this business, he said that the company could evaluate the option of bringing the UK retail brand to India. “We could look at all kinds of possibilities,” Mr Khandelwal said.
Alok Industries CFO Sunil Khandelwal said that the total value of the real estate portfolio, held in step-down subsidiary, is Rs 2,200 crore. The company expects to receive at least Rs 1,500 crore by March 2012 end. “We have 6,40,000 sq ft of commercial real estate held in step-down subsidiaries,” he added.
Alok Industries primarily makes textiles and owns retail stores in India and the UK. The company operates 260 stores called ‘H&A’ in India. Mr Khandelwal said that the company was looking to raise private equity for the retail business two years ago.
“We are looking to expand to 400 stores by March 2011 end. We will look at value unlocking in the retail business only when we reach 700 to 800 stories over the next couple of years,” he added. Mr Khandelwal said that the company follows a franchisee model.
In case of the UK stores, Alok could consider exiting the business, he said. UK retail stores ‘Store twenty one’ are expected to make profits this year. “The idea was to push Alok Industries products. However, these stores no longer sell any significant Alok Industries products,” he added.
While he did not specify any time line for selling this business, he said that the company could evaluate the option of bringing the UK retail brand to India. “We could look at all kinds of possibilities,” Mr Khandelwal said.
The core textile business is expected to grow at 10-11%, in line with industry growth. Mr Khandelwal said the textile industry in India is expected to grow to $220 billion from $70 billion currently in the next 10 years. Alok Industries reported Rs 1,451-crore revenue for the quarter ended September 30. The company’s market cap stood at Rs 2,245 crore.
Source: http://economictimes.indiatimes.com/news/news-by-industry/cons-products/garments-/-textiles/Alok-Industries-to-cut-debt-equity-ratio/articleshow/6874176.cms
Textile processing, sizing industries call off strike
KHALID ABBAS SAIF
FAISALABAD (November 05, 2010) : Textile Processing and Sizing Industries have called off strike against Gas Shedding Schedule after restoring the gas supply, here on Thursday, while Owners and workers Powerlooms industry took out procession at various places and strongly demanded that the government should immediately banned the export of cotton and yarn to save the Value Added Textile Industry and its three million labourers across the country.
Protestors announced that if demands not accepted, the labour intensive powerlooms industry will observed strike for indefinite period from November 10. Talking to newsmen, Salamat Ali, Chairman, Pakistan Hosiery Manufacturers & Exporters Association (PHMA) North Zone disclosed that the Federal Government has accepted the industrial demand to end the discriminatory gas shedding and assured that gas shedding will be observed across the board under a new schedule, which will chalk out with the consultation of industrialists.
He said that the spinners and other concerned lobbies are creating such an atmosphere as to force the labour intensive and export oriented Value Added Textile Industry to roll back and set down for complete closure. He mentioned that the excessive export of cotton and yarn was damaging the textile industry and exports. He pointed out that India had refused to provide cotton to Pakistan due to its shortfall, while our government facilitating the cotton and yarn exporters ignoring the three million shortfall of cotton.
Salamat Ali, Chairman, (PHMA) North Zone demanded that the export of cotton and yarn should be banned to control the burning situation, which hampering the industry and three million labour's livelihood. He said that the recent 60 percent increase in yarn within a month would also further aggravate the economic situation, while discriminatory gas shedding adding fuel to the fire.
He said that the spinners and other concerned lobbies are creating such an atmosphere as to force the labour intensive and export oriented Value Added Textile Industry to roll back and set down for complete closure. He mentioned that the excessive export of cotton and yarn was damaging the textile industry and exports. He pointed out that India had refused to provide cotton to Pakistan due to its shortfall, while our government facilitating the cotton and yarn exporters ignoring the three million shortfall of cotton.
Salamat Ali, Chairman, (PHMA) North Zone demanded that the export of cotton and yarn should be banned to control the burning situation, which hampering the industry and three million labour's livelihood. He said that the recent 60 percent increase in yarn within a month would also further aggravate the economic situation, while discriminatory gas shedding adding fuel to the fire.
He said that hike in the petroleum products prices would not only create problems for the weavers, knitters and exporters, but at the domestic front the cost of industrial production would also increase many fold. Doing unfair business for industrial sector is yielding negative impact on the domestic and foreign investment in Pakistan, which is registered 30 percent decline during the current fiscal year. Most of the industrialists are facing financial crunch, he added.
He demanded to the government that the export of cotton and yarn should be totally banned till meeting the demands of the domestic sector and should be eliminated the monopolists and capital Mafia, who are adding fuel to the fire by their speculative activities ignoring the national interests.
Addressing a media conference, Waheed Khaliq Raamay, Chairman Council of Loom Owners Association announced that if the government not control the excessive export of cotton and yarn, the power-looms industry would go indefinite strike, which is providing the livelihood to one million workers.
Source: http://www.brecorder.com/news/cotton-and-textiles/pakistan/1121208:textile-processing-sizing-industries-call-off-strike.html
FAISALABAD (November 05, 2010) : Textile Processing and Sizing Industries have called off strike against Gas Shedding Schedule after restoring the gas supply, here on Thursday, while Owners and workers Powerlooms industry took out procession at various places and strongly demanded that the government should immediately banned the export of cotton and yarn to save the Value Added Textile Industry and its three million labourers across the country.
Protestors announced that if demands not accepted, the labour intensive powerlooms industry will observed strike for indefinite period from November 10. Talking to newsmen, Salamat Ali, Chairman, Pakistan Hosiery Manufacturers & Exporters Association (PHMA) North Zone disclosed that the Federal Government has accepted the industrial demand to end the discriminatory gas shedding and assured that gas shedding will be observed across the board under a new schedule, which will chalk out with the consultation of industrialists.
He said that the spinners and other concerned lobbies are creating such an atmosphere as to force the labour intensive and export oriented Value Added Textile Industry to roll back and set down for complete closure. He mentioned that the excessive export of cotton and yarn was damaging the textile industry and exports. He pointed out that India had refused to provide cotton to Pakistan due to its shortfall, while our government facilitating the cotton and yarn exporters ignoring the three million shortfall of cotton.
Salamat Ali, Chairman, (PHMA) North Zone demanded that the export of cotton and yarn should be banned to control the burning situation, which hampering the industry and three million labour's livelihood. He said that the recent 60 percent increase in yarn within a month would also further aggravate the economic situation, while discriminatory gas shedding adding fuel to the fire.
He said that the spinners and other concerned lobbies are creating such an atmosphere as to force the labour intensive and export oriented Value Added Textile Industry to roll back and set down for complete closure. He mentioned that the excessive export of cotton and yarn was damaging the textile industry and exports. He pointed out that India had refused to provide cotton to Pakistan due to its shortfall, while our government facilitating the cotton and yarn exporters ignoring the three million shortfall of cotton.
Salamat Ali, Chairman, (PHMA) North Zone demanded that the export of cotton and yarn should be banned to control the burning situation, which hampering the industry and three million labour's livelihood. He said that the recent 60 percent increase in yarn within a month would also further aggravate the economic situation, while discriminatory gas shedding adding fuel to the fire.
He said that hike in the petroleum products prices would not only create problems for the weavers, knitters and exporters, but at the domestic front the cost of industrial production would also increase many fold. Doing unfair business for industrial sector is yielding negative impact on the domestic and foreign investment in Pakistan, which is registered 30 percent decline during the current fiscal year. Most of the industrialists are facing financial crunch, he added.
He demanded to the government that the export of cotton and yarn should be totally banned till meeting the demands of the domestic sector and should be eliminated the monopolists and capital Mafia, who are adding fuel to the fire by their speculative activities ignoring the national interests.
Addressing a media conference, Waheed Khaliq Raamay, Chairman Council of Loom Owners Association announced that if the government not control the excessive export of cotton and yarn, the power-looms industry would go indefinite strike, which is providing the livelihood to one million workers.
Source: http://www.brecorder.com/news/cotton-and-textiles/pakistan/1121208:textile-processing-sizing-industries-call-off-strike.html
Friday, November 5, 2010
Chinese textile exporters struggle amid rising costs
19:44, November 04, 2010
Exporters of textiles at the Canton Fair, China's largest trade fair, say they are struggling to survive amid rising raw material and labor costs.
"Wages have increased as much as 30 percent. But several of our partner plants have stopped production because of the worker shortage," said Chen Su, the assistant to the general manager at Sunvim Group, China's biggest home textile company, Thursday.
In addition, prices of raw materials are rising rapidly. Cotton prices have risen from 18,160 yuan (2,720 U.S. dollars) to 27,405 yuan per tonne, a 51 percent increase. The prices of other fabrics are also rising.
Furthermore, labor and raw material shortages often hampers the production of textile plants, leading to delivery delays, one of the greatest concerns for buyers.
Elliot Gessle, a British buyer at the Canton Fair, thinks Chinese textile products have lost their competitiveness. "Prices of most products are rising. But delivery delays have been the greatest headache," he said. Exporters of textiles at the Canton Fair, China's largest trade fair, say they are struggling to survive amid rising raw material and labor costs.
"Wages have increased as much as 30 percent. But several of our partner plants have stopped production because of the worker shortage," said Chen Su, the assistant to the general manager at Sunvim Group, China's biggest home textile company, Thursday.
In addition, prices of raw materials are rising rapidly. Cotton prices have risen from 18,160 yuan (2,720 U.S. dollars) to 27,405 yuan per tonne, a 51 percent increase. The prices of other fabrics are also rising.
Exporters of textiles at the Canton Fair, China's largest trade fair, say they are struggling to survive amid rising raw material and labor costs.
"Wages have increased as much as 30 percent. But several of our partner plants have stopped production because of the worker shortage," said Chen Su, the assistant to the general manager at Sunvim Group, China's biggest home textile company, Thursday.
In addition, prices of raw materials are rising rapidly. Cotton prices have risen from 18,160 yuan (2,720 U.S. dollars) to 27,405 yuan per tonne, a 51 percent increase. The prices of other fabrics are also rising.
Furthermore, labor and raw material shortages often hampers the production of textile plants, leading to delivery delays, one of the greatest concerns for buyers.
Elliot Gessle, a British buyer at the Canton Fair, thinks Chinese textile products have lost their competitiveness. "Prices of most products are rising. But delivery delays have been the greatest headache," he said. Exporters of textiles at the Canton Fair, China's largest trade fair, say they are struggling to survive amid rising raw material and labor costs.
"Wages have increased as much as 30 percent. But several of our partner plants have stopped production because of the worker shortage," said Chen Su, the assistant to the general manager at Sunvim Group, China's biggest home textile company, Thursday.
In addition, prices of raw materials are rising rapidly. Cotton prices have risen from 18,160 yuan (2,720 U.S. dollars) to 27,405 yuan per tonne, a 51 percent increase. The prices of other fabrics are also rising.
Source: http://english.peopledaily.com.cn/90001/90778/90860/7188811.html
Cotton Soars to Record on Mounting Demand in China, ‘Bull Feast’
Nov. 4 (Bloomberg) -- Cotton soared to a record $1.4052 a pound in New York on concern that global demand led by China will outstrip production and erode inventories. Prices have rallied 86 percent this year on concern that damage to China’s crop may force domestic mills to import more cotton than estimated, reducing global stockpiles already forecast to drop to a 14-year low. The fiber has been the best- performing commodity on the Thomson Reuters/Jefferies CRB Index over the past 12 months.
“Even at $1.35, demand has not cooled off,” said Rogers Varner, the president of brokerage Varner Bros. in Cleveland, Mississippi. “It’s a bull feast.” Cotton for December delivery rose 4.93 cents, or 3.6 percent, to settle at $1.4045 a pound at 2:48 p.m. on ICE Futures U.S. Earlier, prices reached $1.4052, the highest level since the fiber began trading 140 years ago. The commodity has more than doubled in the past 12 months.
In China, cotton futures for May delivery reached a record of 29,980 yuan a metric ton yesterday on the Zhengzhou Commodity Exchange.
The U.S., the world’s biggest exporter, shipped 560,798 bales of upland cotton for the week ended Oct. 28, up 20 percent from the average of the previous four weeks, the U.S. Department of Agriculture said today. China, the largest user of the fiber, purchased 59 percent of the exports.
Government Price Control
China’s government is increasing its control on the price of cotton and will pay attention to challenges faced by textile companies, said Wen Zhongliang, the commercial counselor at the Ministry of Commerce’s foreign trade department. Wen attributed rising prices to an expected production deficit this year and speculative buying.
“Small, family-owned mills are forced to close due to raw- cotton prices being too high,” Sharon Johnson, a senior analyst at First Capitol Group LLC in Atlanta, said in a report yesterday. China is “especially hard hit,” she said.
Boraas Waefveri AB said it filed for bankruptcy as the rising cost of cotton and a lack of sales at the Krenholm Valduse division in Estonia prevented the Swedish textile maker from returning to profit.
Surging cotton prices may mean more expensive clothes, sheets and towels as textile mills including India’s Arvind Ltd. and retailers such as Next Plc pass along higher costs to their customers.
Next, a Leicester, England-based clothing retailer, said yesterday it will raise prices as much as 8 percent in the first quarter because of the jump in costs. Ahmedabad, Gujarat-based Arvind, the world’s largest denim maker and a supplier to jeans maker Levi Strauss & Co. and Gap Inc., has raised prices by as much as 15 percent, Citigroup Inc. economists Rohini Malkani and Anushka Shah wrote in an Oct. 11 report.
--With assistance from Jae Hur in Tokyo. Editors: Millie Munshi, Steve Stroth
To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
Source: http://www.businessweek.com/news/2010-11-04/cotton-soars-to-record-on-mounting-demand-in-china-bull-feast-.html
“Even at $1.35, demand has not cooled off,” said Rogers Varner, the president of brokerage Varner Bros. in Cleveland, Mississippi. “It’s a bull feast.” Cotton for December delivery rose 4.93 cents, or 3.6 percent, to settle at $1.4045 a pound at 2:48 p.m. on ICE Futures U.S. Earlier, prices reached $1.4052, the highest level since the fiber began trading 140 years ago. The commodity has more than doubled in the past 12 months.
In China, cotton futures for May delivery reached a record of 29,980 yuan a metric ton yesterday on the Zhengzhou Commodity Exchange.
The U.S., the world’s biggest exporter, shipped 560,798 bales of upland cotton for the week ended Oct. 28, up 20 percent from the average of the previous four weeks, the U.S. Department of Agriculture said today. China, the largest user of the fiber, purchased 59 percent of the exports.
Government Price Control
China’s government is increasing its control on the price of cotton and will pay attention to challenges faced by textile companies, said Wen Zhongliang, the commercial counselor at the Ministry of Commerce’s foreign trade department. Wen attributed rising prices to an expected production deficit this year and speculative buying.
“Small, family-owned mills are forced to close due to raw- cotton prices being too high,” Sharon Johnson, a senior analyst at First Capitol Group LLC in Atlanta, said in a report yesterday. China is “especially hard hit,” she said.
Boraas Waefveri AB said it filed for bankruptcy as the rising cost of cotton and a lack of sales at the Krenholm Valduse division in Estonia prevented the Swedish textile maker from returning to profit.
Surging cotton prices may mean more expensive clothes, sheets and towels as textile mills including India’s Arvind Ltd. and retailers such as Next Plc pass along higher costs to their customers.
Next, a Leicester, England-based clothing retailer, said yesterday it will raise prices as much as 8 percent in the first quarter because of the jump in costs. Ahmedabad, Gujarat-based Arvind, the world’s largest denim maker and a supplier to jeans maker Levi Strauss & Co. and Gap Inc., has raised prices by as much as 15 percent, Citigroup Inc. economists Rohini Malkani and Anushka Shah wrote in an Oct. 11 report.
--With assistance from Jae Hur in Tokyo. Editors: Millie Munshi, Steve Stroth
To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
Source: http://www.businessweek.com/news/2010-11-04/cotton-soars-to-record-on-mounting-demand-in-china-bull-feast-.html
Lint prices hit Rs 9,000 mark, spot rate at Rs 8,500 amid rumours of tight Supplies
KARACHI (November 04, 2010) : Prices were sharply higher on the cotton market on Wednesday as mills and exporters did active buying following the tight supplies rumours, dealers said. The Karachi Cotton Association (KCA) raised official spot rate by Rs 200 to Rs 8,500, they said.
In the ready business over 30,000 bales of cotton changed hands between Rs 8,400-9,000, they said. Seed cotton prices in Sindh and Punjab were sharply higher by Rs 100 to Rs 3900-4100 due to panic buying, they said. Market sources said that prices are tracking the NY cotton futures and tight supplies and delay by India in finalising the contracts causing rising uncertainties among cotton traders and this factor is pushing the prices sharply up.
According to a report the latest spike in US cotton futures to record highs replicates a bullish pattern that has been recurring for the last six weeks, where higher highs and higher lows point to a continued upward march. In Asia on Wednesday the US and China cotton futures climbed to all-time highs as tightening global supplies and strong demand from the world's top importer, China, continued to bolster the markets.
Bullish fundamentals have drawn large inflows of speculative funds into cotton, making it the best performing commodity this year, outshining the record-setting gold market and wheat futures. China's benchmark Zhengzhou cotton jumped 4.6 percent to 29,950 yuan a tonne, setting a new record for a third straight day, while the ICE Futures benchmark December cotton contract rose to a historic high of $1.3810 per lb in Asian trade.
On Tuesday the US cotton futures rallied to a fresh record due to speculative fund and trade buying sparked by a surge in China's cotton prices and worries over tight supplies spilling into the spring, analysts said. Analysts estimate that 80 percent of the US cotton crop, which is forecast at 18.87 million (480-lb) bales, already has been sold. They said most other major producers, such as Central Asia and Brazil, have sold their cotton as well. The benchmark December cotton contract rose the five-cent daily limit to trade at a record $1.3426 per lb at 9:57 am EDT (1357 GMT). The session low was at $1.2945.
The following deals were reported: 2000 bales of cotton from Rajan Pur sold at Rs 9000, 3000 bales from Shahdad Pur at Rs 8500-8600, 3000 bales from Tando Adam at Rs 8500-8600, 2000 bales from Mir Pur Khas at Rs 84000-8600, 1000 bales from Hyderabad at Rs 8500, 2000 bales from Sanghar at Rs 8400-8500, 2000 bales from Khairpur 8550-8600, 2000 bales from Upper Sindh at Rs 8700-8800, 400 bales from Chistian at Rs 8400, 400 bales from Khan Pur at Rs 8500, 3000 bales from Burewala at Rs 8500-8600, 1000 bales from Haroonabad at Rs 8400-8600, 1000 bales from Sadiqabad at Rs 8500, 600 bales from Hasil Pur at Rs 8500, 3000 bales from Khanewal at Rs 8500-8700, 200 bales from Shujabad at Rs 8500, 400 bales from Jahania at Rs 8500-8600, 1400 bales from Ahmed Pur at Rs 8600, 800 bales from Jan Pur at Rs 8600, 600 bales from Chichawatni at Rs 8600, 200 bales from Duniya Pur at Rs 8600, 1000 bales from Rajan Pur at Rs 8700-8750and 1000 bales from Dera Ghazi Khan at Rs 8700-8750.
===========================================================================
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 Spot Rate Difference
For Price Ex-Karachi Ex. KHI. As Ex-Karachi
on 02.11.2010
===========================================================================
37.324 Kgs 8,500 120 8,620 8,420 +200
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 Kgs 9,109 120 9,229 9,015 +214 ===========================================================================
Copyright Business Recorder, 2010
Source: http://www.brecorder.com/news/cotton-and-textiles/pakistan/1120962:lint-prices-hit-rs-9-000-mark-spot-rate-at-rs-8-500-amid-rumours-of-tight-supplies.html
In the ready business over 30,000 bales of cotton changed hands between Rs 8,400-9,000, they said. Seed cotton prices in Sindh and Punjab were sharply higher by Rs 100 to Rs 3900-4100 due to panic buying, they said. Market sources said that prices are tracking the NY cotton futures and tight supplies and delay by India in finalising the contracts causing rising uncertainties among cotton traders and this factor is pushing the prices sharply up.
According to a report the latest spike in US cotton futures to record highs replicates a bullish pattern that has been recurring for the last six weeks, where higher highs and higher lows point to a continued upward march. In Asia on Wednesday the US and China cotton futures climbed to all-time highs as tightening global supplies and strong demand from the world's top importer, China, continued to bolster the markets.
Bullish fundamentals have drawn large inflows of speculative funds into cotton, making it the best performing commodity this year, outshining the record-setting gold market and wheat futures. China's benchmark Zhengzhou cotton jumped 4.6 percent to 29,950 yuan a tonne, setting a new record for a third straight day, while the ICE Futures benchmark December cotton contract rose to a historic high of $1.3810 per lb in Asian trade.
On Tuesday the US cotton futures rallied to a fresh record due to speculative fund and trade buying sparked by a surge in China's cotton prices and worries over tight supplies spilling into the spring, analysts said. Analysts estimate that 80 percent of the US cotton crop, which is forecast at 18.87 million (480-lb) bales, already has been sold. They said most other major producers, such as Central Asia and Brazil, have sold their cotton as well. The benchmark December cotton contract rose the five-cent daily limit to trade at a record $1.3426 per lb at 9:57 am EDT (1357 GMT). The session low was at $1.2945.
The following deals were reported: 2000 bales of cotton from Rajan Pur sold at Rs 9000, 3000 bales from Shahdad Pur at Rs 8500-8600, 3000 bales from Tando Adam at Rs 8500-8600, 2000 bales from Mir Pur Khas at Rs 84000-8600, 1000 bales from Hyderabad at Rs 8500, 2000 bales from Sanghar at Rs 8400-8500, 2000 bales from Khairpur 8550-8600, 2000 bales from Upper Sindh at Rs 8700-8800, 400 bales from Chistian at Rs 8400, 400 bales from Khan Pur at Rs 8500, 3000 bales from Burewala at Rs 8500-8600, 1000 bales from Haroonabad at Rs 8400-8600, 1000 bales from Sadiqabad at Rs 8500, 600 bales from Hasil Pur at Rs 8500, 3000 bales from Khanewal at Rs 8500-8700, 200 bales from Shujabad at Rs 8500, 400 bales from Jahania at Rs 8500-8600, 1400 bales from Ahmed Pur at Rs 8600, 800 bales from Jan Pur at Rs 8600, 600 bales from Chichawatni at Rs 8600, 200 bales from Duniya Pur at Rs 8600, 1000 bales from Rajan Pur at Rs 8700-8750and 1000 bales from Dera Ghazi Khan at Rs 8700-8750.
===========================================================================
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 Spot Rate Difference
For Price Ex-Karachi Ex. KHI. As Ex-Karachi
on 02.11.2010
===========================================================================
37.324 Kgs 8,500 120 8,620 8,420 +200
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Equivalent
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40 Kgs 9,109 120 9,229 9,015 +214 ===========================================================================
Copyright Business Recorder, 2010
Source: http://www.brecorder.com/news/cotton-and-textiles/pakistan/1120962:lint-prices-hit-rs-9-000-mark-spot-rate-at-rs-8-500-amid-rumours-of-tight-supplies.html
China National Cotton Exchange to Tighten Price Controls, Cut Volatility
By Bloomberg News - Nov 4, 2010 2:16 PM GMT+0530 Thu Nov 04 08:46:44 GMT 2010
China National Cotton Exchange said it will take measures to stabilize cotton prices and reduce volatility, the exchange said in a statement on its website today.
The exchange will curb cotton price manipulations and tighten risk controls, according to the statement.
Source: http://www.bloomberg.com/news/2010-11-04/china-national-cotton-exchange-to-tighten-price-controls-cut-volatility.html
China National Cotton Exchange said it will take measures to stabilize cotton prices and reduce volatility, the exchange said in a statement on its website today.
The exchange will curb cotton price manipulations and tighten risk controls, according to the statement.
Tuesday, November 2, 2010
OUTLOOK-India cotton seen down on arrivals
MUMBAI Nov 1 (Reuters) - Indian cotton may edge lower during the week as arrivals are in full swing in most growing areas, but beginning of exports may limit losses, traders said on Monday.
"Arrivals have started in most places now. Prices have cooled down by about two percent since last week," said an official with the state-run procurer Cotton Corp. of India.
The arrivals stood at 2.11 million bales (of 170 kg each) as on October 30, compared with 1.72 million bales during the same period in the previous year, the official said.
India has allowed cotton exports for the 2010/11 season from Monday, an official with the federal textile ministry told Reuters. See [ID:nSGE6A00DS]
India, the world's second-biggest producer and exporter of cotton, delayed exports by one month until Nov. 1, as arrivals of the fibre were delayed. See [ID:nSGE68R0LV]
India has stipulated the exports at 5.5 million bales to facilitate domestic supplies. [ID:nSGE69A0AA]
In India, the most common Shankar-6 variety was trading at 41,600 rupees per candy (of 356 kg each) on Monday, up about 80 percent compared with a year ago, data with the Cotton Association of India showed.
Cotton output in India is likely to jump to a record 35 million bales in 2010/11, higher than the earlier estimates of 32.5 million bales, on better yields. [ID:nSGE68L0F2]
(Reporting by Sourav Mishra; editing by Sunil Nair)
Source: http://in.reuters.com/article/idINSGE6A00IR20101101
"Arrivals have started in most places now. Prices have cooled down by about two percent since last week," said an official with the state-run procurer Cotton Corp. of India.
The arrivals stood at 2.11 million bales (of 170 kg each) as on October 30, compared with 1.72 million bales during the same period in the previous year, the official said.
India has allowed cotton exports for the 2010/11 season from Monday, an official with the federal textile ministry told Reuters. See [ID:nSGE6A00DS]
India, the world's second-biggest producer and exporter of cotton, delayed exports by one month until Nov. 1, as arrivals of the fibre were delayed. See [ID:nSGE68R0LV]
India has stipulated the exports at 5.5 million bales to facilitate domestic supplies. [ID:nSGE69A0AA]
In India, the most common Shankar-6 variety was trading at 41,600 rupees per candy (of 356 kg each) on Monday, up about 80 percent compared with a year ago, data with the Cotton Association of India showed.
Cotton output in India is likely to jump to a record 35 million bales in 2010/11, higher than the earlier estimates of 32.5 million bales, on better yields. [ID:nSGE68L0F2]
(Reporting by Sourav Mishra; editing by Sunil Nair)
Source: http://in.reuters.com/article/idINSGE6A00IR20101101
Wednesday, September 15, 2010
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