D Gopi / Guntur November 30, 2010, 0:38 IST
Cotton prices in the open market this season have so far remained satisfactory, giving a sigh of relief to the growers. The incessant rain and flood that had marooned the fields initially dashed hopes of farmers as they feared that the crop would get discoloured and the price would fall drastically. However, the first round of sales that began in the third week of November saw farmers fetching remunerative prices as traders and millers picked up the product from various auction centres.
The Cotton Corporation of India (CCI) is still waiting at the auction centres for its turn to buy the stock at the minimum support price (MSP) of Rs 3,000 a quintal. Interestingly, the product is now being sold at the highest price of Rs 4,600 a quintal, which was recorded at the Adoni market yard in Prakasam district of the state. The price in the current season is ranging between Rs 3,500 and Rs 4,600 a quintal based on the colour. The cotton, which has lost its colour is getting slightly lower than the MSP. The discolour problem is only seen in the black cotton soil, which was affected by the incessant rains and water logging.
With the weather changing in the last two weeks, the first harvest from the black cotton soil has started arriving at the auction platforms. The harvest from the light black cotton soils and southern cotton soils that arrived at the auction platforms is doing well and the prices are more than the MSP. If the weather remains dry for the next couple of weeks, the prices are expected to cross Rs 4,800 to Rs 5,000 a quintal.
“We have positioned our personnel at all the auction platforms and if the price comes down near to the MSP, we would buy the product to support the farmers. But, as of now, farmers are on the safe side and there is no worry for them unless the crop gets discoloured or the moisture content increases beyond the permitted level of 8 to 10 per cent,” said CCI deputy general manager, S K Panigrahi.
This year, the CCI cleared 30 purchase centres in the state as against 39 in the 2009-10 season. The CCI had brought down its purchase centres mainly because the local spinning mills had increased their capacity and were buying more quantity.
The board has estimated cotton production at 32.5 million bales for the season 2010-11, as against 29.5 million bales in 2009-10. The increase in production comes on the back of increased acreage and the use of Bt seeds, the board said. Andhra Pradesh farmers are placed in a better position this season as the production in Gujarat, Madhya Pradesh and Maharashtra is expected to come down due to rains in the last two weeks.
So far, 4.6 million bales of cotton had arrived from various states by November 21, as against 4.8 million bales during the same period in 2009. Gujarat continued to top with arrivals in the current season at 1.4 million bales by November 21, followed by Maharashtra with 990,000 bales, Punjab with 542,000 bales and Andhra Pradesh with 530,000 bales. Last season, during the same period, arrivals from Gujarat stood at 1.8 million bales, followed by 550,000 bales from AP. The fall in arrivals from Gujarat this year, despite increased acreage, has been attributed to the heavy rains.
Source: http://www.business-standard.com/india/news/cotton-pricesdespite-rain/416589/
Tuesday, November 30, 2010
Cotton Futures Rise on Signs of Lending in China;
By Leslie Patton - Nov 30, 2010 1:57 AM GMT+0530 Mon Nov 29 20:27:33 GMT 2010
Cotton rose the most allowed in New York, after slumping by the exchange limit three times last week, as efforts to curb inflation may be less severe than expected in China, the world’s top consumer.
Data from China’s central bank suggest the country’s domestic banks may end up lending more money this year than the government intended. After raising interest rates last month, officials have threatened to impose controls to curb agriculture prices and the fastest inflation in 25 months. Cotton has dropped 24 percent from a record earlier this month.
“The Chinese stepping on the brakes is not as severe as initially feared,” said Peter Egli, the director of risk management in Chicago at Plexus Cotton Ltd., a U.K.-based merchant. “That may have led to a little bit of a turnaround in the Chinese market.”
Cotton for March delivery rose by the exchange maximum of 4 cents, or 3.6 percent, to settle at $1.1576 a pound at 2:37 p.m. on ICE Futures U.S. in New York. The fiber lost 9.2 percent last week, the biggest such drop since February 2009.
Cotton futures have jumped 53 percent this year, reaching a record of $1.5195 a pound on Nov. 10. Prices surged on concerns that mounting demand in China would outpace dwindling supplies in countries around the world, especially in the U.S., the largest exporter.
China’s domestic banks extended 6.9 trillion yuan ($1.04 trillion) of new loans in the 10 months through October, suggesting that the government’s full-year target of 7.5 trillion yuan may be breached, according to central bank data.
Cotlook Index
China’s government will hold an annual economic meeting in Beijing late next week to set guidelines for monetary and fiscal policy in 2011, two people with knowledge of the matter said. Officials may discuss lending and inflation targets at the Dec. 10-12 meeting, one of the people said, speaking on condition of anonymity.
Cotton rose the most allowed in New York, after slumping by the exchange limit three times last week, as efforts to curb inflation may be less severe than expected in China, the world’s top consumer.
Data from China’s central bank suggest the country’s domestic banks may end up lending more money this year than the government intended. After raising interest rates last month, officials have threatened to impose controls to curb agriculture prices and the fastest inflation in 25 months. Cotton has dropped 24 percent from a record earlier this month.
“The Chinese stepping on the brakes is not as severe as initially feared,” said Peter Egli, the director of risk management in Chicago at Plexus Cotton Ltd., a U.K.-based merchant. “That may have led to a little bit of a turnaround in the Chinese market.”
Cotton for March delivery rose by the exchange maximum of 4 cents, or 3.6 percent, to settle at $1.1576 a pound at 2:37 p.m. on ICE Futures U.S. in New York. The fiber lost 9.2 percent last week, the biggest such drop since February 2009.
Cotton futures have jumped 53 percent this year, reaching a record of $1.5195 a pound on Nov. 10. Prices surged on concerns that mounting demand in China would outpace dwindling supplies in countries around the world, especially in the U.S., the largest exporter.
China’s domestic banks extended 6.9 trillion yuan ($1.04 trillion) of new loans in the 10 months through October, suggesting that the government’s full-year target of 7.5 trillion yuan may be breached, according to central bank data.
Cotlook Index
The Cotlook A Index, which reflects the average of the five cheapest cotton prices at Far East ports, fell 3.2 percent to $1.4335 a pound today. The difference between the Cotlook A Index and cotton futures prices was 27.59 cents today, down from a 15-year high of 36.34 cents last week.
“The physical prices as represented by the A Index are way overvalued or the futures market is way undervalued,” Egli said. “Maybe the two will approach each other again.”
In China, demand will outpace supply by 17 million bales in the year that ends in July, the U.S. Department of Agriculture forecast earlier this month. The Asian nation may import 15 million bales, up 38 percent from last year, according to a Nov. 9 USDA report. A bale weighs 480 pounds, or 218 kilograms.
Cotton output in China may fall 5.5 percent this year to 6.36 million metric tons after rain and cold weather damaged crops, research company Cncotton.com has said.
Source: http://www.bloomberg.com/news/2010-11-29/cotton-rebounds-from-biggest-weekly-loss-in-21-months-on-china-s-lending.html
Monday, November 29, 2010
Reports about the risk of credit card default in China spark panic in the domestic cotton market.
Reports about the risk of credit card default in China spark panic in the domestic cotton market.
KARACHI: Reports about the risk of credit card default in China sparked panic in the domestic cotton market on Saturday, pushing prices to Rs8,000 per maund (37.324 kg). The official spot rate stood at Rs8,500.
According to the Wall Street Journal, China’s central bank, in its third quarter report released a couple of days back, noted a rapid increase in credit card lending and warned about risks of default, as regulators seek to manage ample liquidity in the banking sector. China, a major importer of Pakistani cotton, is one of the main drivers of the domestic market, but warning of the risk of default forced ginners to sell cotton at whatever prices offered by the mills, cotton analyst Shakil Ahmed said. Earlier in the day, the market was doing well and prices had increased to Rs9,000 per maund.
The New York cotton market, which has dropped sharply from its highs of $1.57 per pound earlier this month, also had an impact on Pakistan’s market. On Friday, benchmark March contract on the New York market fell 4.83 cents to 111.73 cents as the US started supplying new crop, while crops of Brazil and Argentina are due in coming days.
This season, Pakistan’s cotton crop is expected to face a shortfall of 1.5 to 2 million bales because of damage to the fields caused by the floods. The country is expected to produce 12.5 million bales compared with annual consumption of 16 million bales.
Ahmed said the deficit will be bridged through import from Brazil, Argentina and central Asian states. India is also a potential and preferred supplier and its traders are offering cotton at 124 to 125 cents per pound to Pakistani importers.
However, Ahmed said, traders have expressed fear that Indian exporters may back down from their offers if prices again climbed in the international market.
Earlier in the season, importers had contracted to buy 550,000 bales from India at 70 to 90 cents but the Indians later refused to supply at these prices when the world market shot up to around 120 cents per pound.
Ahmed predicted that cotton prices in the domestic market will reach around Rs10,000 in February next year as supplies will dry up by then and the new crop will not come before July.
KARACHI: Reports about the risk of credit card default in China sparked panic in the domestic cotton market on Saturday, pushing prices to Rs8,000 per maund (37.324 kg). The official spot rate stood at Rs8,500.
According to the Wall Street Journal, China’s central bank, in its third quarter report released a couple of days back, noted a rapid increase in credit card lending and warned about risks of default, as regulators seek to manage ample liquidity in the banking sector. China, a major importer of Pakistani cotton, is one of the main drivers of the domestic market, but warning of the risk of default forced ginners to sell cotton at whatever prices offered by the mills, cotton analyst Shakil Ahmed said. Earlier in the day, the market was doing well and prices had increased to Rs9,000 per maund.
The New York cotton market, which has dropped sharply from its highs of $1.57 per pound earlier this month, also had an impact on Pakistan’s market. On Friday, benchmark March contract on the New York market fell 4.83 cents to 111.73 cents as the US started supplying new crop, while crops of Brazil and Argentina are due in coming days.
This season, Pakistan’s cotton crop is expected to face a shortfall of 1.5 to 2 million bales because of damage to the fields caused by the floods. The country is expected to produce 12.5 million bales compared with annual consumption of 16 million bales.
Ahmed said the deficit will be bridged through import from Brazil, Argentina and central Asian states. India is also a potential and preferred supplier and its traders are offering cotton at 124 to 125 cents per pound to Pakistani importers.
However, Ahmed said, traders have expressed fear that Indian exporters may back down from their offers if prices again climbed in the international market.
Earlier in the season, importers had contracted to buy 550,000 bales from India at 70 to 90 cents but the Indians later refused to supply at these prices when the world market shot up to around 120 cents per pound.
Ahmed predicted that cotton prices in the domestic market will reach around Rs10,000 in February next year as supplies will dry up by then and the new crop will not come before July.
Source: http://tribune.com.pk/story/82754/china-rumours-send-cotton-market-lower/
Cotton exports may fall short of commitments
Shipments may touch 20 lakh bales by Dec 15 deadline.
Amit Mitra
Hyderabad, Nov. 27
With cotton arrivals being tardy in the wake of unseasonal rains damaging the crop in some cotton producing States, exporters of the commodity are reconciling to the prospect of not being able to fulfil the export contracts for 55 lakh bales (of 170 kg) by December 15, the maximum export limit permitted by the Government.
Industry players are now almost certain that the full export commitment would not be met by the December 15 deadline, with different trade bodies giving different projections of the shortfall.
“Going by different estimates, exports by December 15 could just cross the 20-lakh-bale-mark, according to current trends. Arrivals are, however, beginning to touch the 3-lakh-bales a day level,” said Mr V. Srinivas, Joint secretary, Ministry of Textiles, who was in Hyderabad to participate in a textile industry meet.
Different cotton associations, however, feel that the shortfall could be more.
“In our estimates, we will barely touch 17 lakh bales. In Andhra Pradesh, we were expected to touch a production of 75 lakh bales (this season), but we do not think we can cross 40 lakh bales,” Mr G. Punnaiah Choudary, President of A.P. Cotton Association, told Business Line.
In certain centres, quality cotton arrivals had in fact dipped to 1.4 lakh bales a week ago.
So far, less than 15 lakh bales out of the permitted 55 lakh bales are believed to have been shipped out to different export destinations.Trade bodies are also not sure whether the projected domestic cotton production of 320 lakh bales could be met this season.
“From our estimates, the production will be between 280 and 300 lakh bales,” says Mr Choudary.
The next meeting of the Cotton Advisory Board is expected to take a call on the latest trends and, perhaps, tweak its earlier projections, including on the permissible export quantum.
Yarn prices move up
“Cotton prices are today ruling at Rs 47,000 a candy (of 356 kg) against Rs 22,000 same time last year. We feel that the price will average about Rs 40,000 for this season (which lasts till March 2011),” said Mr M.K. Patodia, CMD of GTN Industries.
In tandem with the rise in cotton prices, yarn prices have also spiralled. “The Government is monitoring the situation closely.
The Group of Ministers constituted for cotton and yarn is scheduled to have another round of meeting next week to take a call on the present situation on both the commodities,” Mr Srinivas said.
Industry sources say that the Government was considering tightening yarn export norms to stabilise domestic prices.
“This, if done, will have a more disastrous effect on the industry,” feels Mr Choudary.
Source: http://www.thehindubusinessline.com/2010/11/28/stories/2010112851780300.htm
Amit Mitra
Hyderabad, Nov. 27
With cotton arrivals being tardy in the wake of unseasonal rains damaging the crop in some cotton producing States, exporters of the commodity are reconciling to the prospect of not being able to fulfil the export contracts for 55 lakh bales (of 170 kg) by December 15, the maximum export limit permitted by the Government.
Industry players are now almost certain that the full export commitment would not be met by the December 15 deadline, with different trade bodies giving different projections of the shortfall.
“Going by different estimates, exports by December 15 could just cross the 20-lakh-bale-mark, according to current trends. Arrivals are, however, beginning to touch the 3-lakh-bales a day level,” said Mr V. Srinivas, Joint secretary, Ministry of Textiles, who was in Hyderabad to participate in a textile industry meet.
Different cotton associations, however, feel that the shortfall could be more.
“In our estimates, we will barely touch 17 lakh bales. In Andhra Pradesh, we were expected to touch a production of 75 lakh bales (this season), but we do not think we can cross 40 lakh bales,” Mr G. Punnaiah Choudary, President of A.P. Cotton Association, told Business Line.
In certain centres, quality cotton arrivals had in fact dipped to 1.4 lakh bales a week ago.
So far, less than 15 lakh bales out of the permitted 55 lakh bales are believed to have been shipped out to different export destinations.Trade bodies are also not sure whether the projected domestic cotton production of 320 lakh bales could be met this season.
“From our estimates, the production will be between 280 and 300 lakh bales,” says Mr Choudary.
The next meeting of the Cotton Advisory Board is expected to take a call on the latest trends and, perhaps, tweak its earlier projections, including on the permissible export quantum.
Yarn prices move up
“Cotton prices are today ruling at Rs 47,000 a candy (of 356 kg) against Rs 22,000 same time last year. We feel that the price will average about Rs 40,000 for this season (which lasts till March 2011),” said Mr M.K. Patodia, CMD of GTN Industries.
In tandem with the rise in cotton prices, yarn prices have also spiralled. “The Government is monitoring the situation closely.
The Group of Ministers constituted for cotton and yarn is scheduled to have another round of meeting next week to take a call on the present situation on both the commodities,” Mr Srinivas said.
Industry sources say that the Government was considering tightening yarn export norms to stabilise domestic prices.
“This, if done, will have a more disastrous effect on the industry,” feels Mr Choudary.
Source: http://www.thehindubusinessline.com/2010/11/28/stories/2010112851780300.htm
Howell: Rebound inspires visions of near bottom as cotton remains pressured
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
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
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
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