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

Capital Market / 11:09 , Dec 14, 2010

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

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

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

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

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

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

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By Debarati Roy and Jae Hur

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

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

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

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

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

U.S. Stockpiles

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

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

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

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

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

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

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

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

 

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

 

China’s Cotton Prices to Stay High, Researcher Says

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

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

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

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

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

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

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

 

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

New York cotton settles at one-month top

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

-- Chinese benchmark rate decision gives cotton a boost

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

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

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

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

Loss in Gujarat cotton crop may be higher

Farmers report sharp fall in production as rain hits crop.

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

M.R. Subramani

Recently in Porbandar

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

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

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

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

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

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

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

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

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

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

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

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

Why India is Crippling the Cotton Industry

December 14, 2010

By Dr. Seshadri Ramkumar, Texas Tech University

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

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

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

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

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

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

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

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

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

Cotton output likely to be around 325 lakh bales

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

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

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

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

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

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

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

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

The crop starts hitting the market from October onwards.

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

Nalgonda weavers seek fair deal in procurement

BS Reporter / Chennai/ Hyderabad December 15, 2010, 0:10 IST

Handloom weaver societies from Nalgonda district on Tuesday made a representation to the Union government seeking fair procurement from all regions for Handloom House retail stores.

The Handloom House in Hyderabad is one of the 23 such stores across the country, and is run by the All-India Handloom Fabrics Marketing Co-operative Society, sponsored by the Union textiles ministry.

They told Rita Menon, secretary, Ministry of Textiles, who was here to inaugurate the renovated showroom, that the society had been reducing procurement from Nalgonda, Medak and Karimnagar districts for the last five years.

According to G Balaiah, convenor of a weavers cell affiliated to the Congress party, there has been no procurement so far this year from primary weaver societies in these districts, and the procurement centre too had been shifted from Hyderabad to Chirala in Prakasam district.

“Fifteen primary societies in Nalgonda district alone used to account for Rs 10 crore, but it is not even Rs 50 lakh now,” he said.

According to Bolla Shivashankar, convenor of Forum for Telangana Handloom Cooperatives Societies, the national society has 73 member societies from the state, of which 17 are from the Telangana region while 29 are from just one district of Anantapur.

The society is governed by a national-level board, which has only one representative from the state, Chanda Venkataswamy, also from Anantapur. The Nalgonda weavers believe that the state representative on the society board is instrumental in changing its procurement policies.

Balaiah alleged that Venkataswamy won the board membership based on votes of non-existent weaver societies in Tadipathri and Uravakonda in Anantapur district, some of which were registered in the names of his own family members and were never audited.

He said they had already met Union textiles minister Dayanidhi Maran in this regard, and would now seek an inquiry by the Central Vigilance Commission into the status of these societies.

 

Source: http://www.business-standard.com/india/news/nalgonda-weavers-seek-fair-deal-in-procurement/418276/

 

Rains, festival leave cotton exporters high and dry

Gujarat production may take 10% hit.

Atop cotton heaps:APMC yard workers load cotton onto a lorry at Gondal APMC yard, 35 km from Rajkot, for transport to a ginning mill. —

M. R. Subramani

Rajkot, Dec. 10

A combination of rain and Diwali holidays, resulting in low arrivals, has led to exporters not being able to get the required 55 lakh bales (170 kg each) for shipments before the December 15 deadline.

In October, the Centre had announced permitting 55 lakh bales of cotton exports from November 1 and fixed a deadline of December 15 for the shipments to sent abroad.

“Exports by December 15 may be 25-30 lakh bales only. What has happened is that we could not buy for 12-15 days from the market due to reasons such as rains and Diwali,” said Mr M. P. Patel, Managing Director, Jaideep Cotton Fibres, an exporter.

The markets were closed for at least five days for Diwali. On top of it, farmers waited for an auspicious day after the festival to sell, he said.

“Another 6-7 days were lost due to heavy rain in the region,” he said. There is demand from China, Turkey, Pakistan and Indonesia, said Mr Anand A Poppat, Managing Director, Jalaram Cotton and Proteins Ltd. Exporters and ginners fear that there could be a loss of 10 per cent in the crop against the initial estimates.

“Some 107 lakh bales were expected to be produced in Gujarat. It could be now 10 per cent lower,” said Mr M.P. Patel.

Lower production

Mr Poppat is of the view that production in Gujarat would be 10 per cent lower than the initial estimates of 130-135 lakh bales.

“There could be damage of 10-15 lakh bales in Gujarat,” said Mr Govindlal G. Patel of Deepak Enterprises. “We think the minimum production in Gujarat will be 90 lakh bales.”

All-India production could be 310-315 lakh bales against initial estimates of 335 lakh bales. However, a section of the traders here thinks that 335 lakh bales is still possible given that an output of 350 lakh bales was projected.

“Rain accompanied by heavy wind has brought down production in my farm to 10 maund (20 kg each) on a bigha (2.5 acres). But for that, the output on my farm could have been 40 maund a bigha,” said Mr Shyamjibhai Raiyani, a pesticide distributor-cum-farmer.

Some farmers at the Dhoraji Agricultural Produce Marketing Committee yard said that their production had halved due to the un-seasonal rain. “The rain has led to boll in the plant falling. And water has seeped into the flowers, affecting the quality of cotton,” said Mr Kalpesh Posiya, a trader at Dhoraji APMC yard.

Black and yellow

There is, therefore, a problem in the cotton that is arriving at various markets in Rajkot district. While some are a little black, the others are a bit yellowish.

“We can set right the black ones while ginning, but the yellow ones are a problem,” said Mr Poppat.

If cotton arrives without any problem or is good in quality, then farmers get a minimum of Rs 900 a maund (20 kg). But any drop in quality sees the prices going down to Rs 850 for cotton with patches of black and around Rs 750 for those with yellow patches.

“If the cotton had been picked up before Diwali, there would have been no problem, or minimum contamination. If the picking was after the festival, then there would have been problems, as we are seeing now,” said Mr Jaisukhbhai Patel, a trader in Gondal APMC yard.

 

 

Source: http://www.blonnet.com/2010/12/11/stories/2010121151111800.htm

 

Loss in Gujarat cotton crop may be higher

Farmers report sharp fall in production as rain hits crop.

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

M.R. Subramani

Recently in Porbandar

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

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

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

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

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

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

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

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

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

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

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

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

 

 

Source: http://www.blonnet.com/2010/12/15/stories/2010121552361800.htm

 

Cotton continues to tumble

M.R. Subramani

Chennai, Dec. 14

Cotton prices continued to tumble on uncertainty over exports, despite arrivals being lower. Prices have dropped Rs 30 for a maund (of 20 kg) in the last four trading sessions.

“Prices on Tuesday dropped Rs 15 a maund. The best quality Shankar-6 cotton sold at Rs 881 a maund as demand from ginners was lower,” said Mr Kalpesh Posiya, a trader at Dhoraji Agricultural Produce Marketing Committee (APMC) yard, in Gujarat's Rajkot district.

“Quality cotton fetched Rs 895 a maund at the most. Otherwise, the general price trend was between Rs 840 and Rs 860,” said Mr Jaisukhbhai Patel, a trader at Gondal APMC yard, near Rajkot.

“Prices have been dropping since last week on uncertainty over exports. As prices are dropping, arrivals too are low,” said Mr Patel.

“Cues from overseas market, too, kept the prices lower,” said Mr Posiya.

Arrivals at Gondal were down at 600-700 bags (60 kg each) from 1,200-1,500 bags last week.

However, the global market looked up on Tuesday with prices rising five cents, the maximum allowed by ICE Futures US in New York, to $1.4597 a pound.

The Centre had allowed exports of 55 lakh bales (of 170 kg) from November 1 and the deadline for shipping the consignments is Wednesday. So far, about 25 lakh bales have been reported t have been exported but the Centre has said that it will have an exact figure on Wednesday.

The Government will also review exports on Wednesday based on the current situation.

Exports hit

Exports were hit by delayed arrivals of cotton in the market due to holidays and unseasonal rain in November.

Meanwhile, the Textiles Commissioner, Mr A.B. Joshi, told reporters in Mumbai that cotton production would not be lower than 325 lakh bales this year.

Shankar-6 was quoted in Mumbai at Rs 40,300 for a candy (356 kg), against nearly Rs 47,000 witnessed a month ago. Prices have been dropping since then on higher arrivals.

source: http://www.blonnet.com/2010/12/15/stories/2010121551701700.htm

Cotton output likely to be around 325-lakh bales

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

“I am sure that it will not be less than 325-lakh bales,” said Mr A B Joshi, Textile Commissioner.

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

 

“Yes, rains had a damaging effect on cotton output, especially in regions like Andhra Pradesh which was hit by cyclonic showers. But as a counter, production from other pockets like Maharashtra has been very high and rains have in fact, helped increase t he output,” Mr Joshi said, indicating that it is a mixed—bag sort of situation.

 

The Cotton Advisory Board (CAB) had made a prediction in August that production could be around 325-lakh bales. Various industry bodies have given different estimates ranging from 300-lakh bales to 350-lakh bales, indicating divergent views on the impact of the rains on cotton production.

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

 

Source: http://www.thehindubusinessline.com/blnus/07141430.htm

 

SIMA E-WEEKLY DEC 5th-11th/2010

TO ALL MEMBER MILLS Please download the Association SIMA E-WEEKLY December 5th-11th/2010 from the following link http://bulkmail.coyd.in/EWNoDec5-11.doc SIMA

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Phone : +91 422 2221391, 4225333 ,   Fax : 91 422 4225366 , Email : info@simamills.com

Knitwear exporters in Tirupur close shop

T E Narasimhan / Tirupur December 14, 2010, 0:34 IST

Around 20 per cent of the units, with revenues between Rs 1 crore and Rs 10 crore, have shut down due to rising cost of raw materials and other inputs.

The rising cost of raw materials and other inputs has resulted in the closure of a large number of small and medium and enterprises (SMEs) in Tirupur, India’s largest knitwear export hub.

According to industry estimates around 20 per cent of the units, with revenues in the range of Rs 1-10 crore, have closed down. The resulting job losses are estimated at 25,000.

A Sakthivel, president of the Tirupur Exporters Association (TEA), said that the town is directly exporting around Rs 12,000 crore every year. Apart from this, around 600 small units in Tirupur are doing job work for exporters based in Delhi, Mumbai and Bangalore, the value of which is Rs 1,000 crore a year.

The tiny town houses around 675 units. This includes 150 units with sales revenues of Rs 1-5 crore, 350 units with revenues of Rs 5-10 crore, 100 units earning revenues of Rs 10-50 crore, 50 units with revenues of Rs 50-100 crore and 25 units with revenues of more than Rs 100 crore.

“Around 20 per cent of the units, which are in the first two categories, have closed down due to the increase in the price of cotton yarn and the non-availability of yarn – the raw material – in the domestic market. This ultimately led to job losses of about 25,000 workers,” Sakthivel said.

According to his estimate, the knitwear industry is likely to report a loss of round Rs 200 crore due to the increase in yarn price. The units say they have stopped taking new orders from customers, since yarn prices are not stable and neither is yarn available.

C Nataraj, director of Stencil Apparels, said, “Most of the units have stopped taking orders, since raw material is not available. This year our company alone will report at least 15 per cent negative growth.” He said his company has received Rs 5 crore worth of enquiries from overseas customers, but he is unable to convert it into an order.

The other challenges for small units are conducting research and development and adapting to frequent changes in customer requirements. “Earlier, there used to be only two seasons and now this has become 12 seasons,” – so frequently do designs change – said C Sekhar, who heads a unit with revenues in the Rs 5-10 crore category.

The other factors that are eroding margins are the costs of power, labour and dyeing. Industry representatives note that dyeing charges account for 8-10 per cent of total costs, compared to 3-4 per cent in competing countries. Pollution norms have also become stringent, and require companies to invest in effluent plants; this adds to costs.

Describing the current situation as “crazy”, D Prem, chairman and managing director of Prem Durai Exports Pvt Ltd, one of the largest exporters in Tirupur, said that to partially compensate for losses, the knitwear industry had increased prices by 15 per cent, adding that this would not be enough. “We have to increase the price by at least 30 per cent, but customers are not willing to absorb this.”

Sakthivel noted that the price of yarn today is Rs 250 per kg, an increase of 80 per cent from Rs 139 per kg in August 2009. However, “the concern is that despite the increase in yarn price, non-availability of cotton yarn is a problem,” he said.

In March 2010, the price of yarn was Rs 165 a kg, but when exporters started booking orders, textile mills stopped delivery of yarn for 15 days and increased the price to Rs 182 a kg, exporters complained. Exporters then began booking garment orders on the basis of this price, only to find that in mid-May 2010, mills had again stopped deliveries and increased the yarn price to Rs 202 a kg, they said.

Source : http://www.business-standard.com/india/news/knitwear-exporters-in-tirupur-close-shop/418155/

Farmers body urges govt to lift ban on cotton exportsDecember 13, 2010 (India)

Several Bhartiya Kisan Sangh (BKS) members are now in Delhi to take part in the 70-day long Kisan Swaraj Yatra which is in its last phase now.

The farmer’s body has been urging the government to remove the ban on cotton exports, and its members are going to approach the Union Agriculture Minister with the same demand.

Further, the union even asserted that the government by imposing such a ban on cotton exports has served the interest of some of the major industry players constituting the textile lobby, while overlooking the interest of a number of farmers who were left with no other option but to commit suicide owing to their inability to secure adequate prices.

The cultivators are still left with added output of 8.5 lakh cotton bales which could enable them to earn extra Rs 300 to 400 per bale, but as the Centre has imposed a ban on the export of cotton, the cultivators are not being able to cash on this extra income. 

However, they are hopeful that the meeting between the BKS members and the Union Agriculture Minister is likely to deliver some positive results.

Fibre2fashion News Desk - India

Source: http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=93910

Indian cotton curb sparks protectionist stance

By: Leonie Barrie - 13 December 2010 15:31

 India's restrictions on raw cotton and cotton yarn exports have given the country the advantage of lower material costs – at least for a while. But its actions have also sparked a round of aggressive trade protection, especially by other textile exporters in the region.

India's initial reaction was to limit raw cotton exports, which meant its cotton prices grew more slowly than elsewhere. But now the country has also extended the restrictions to cotton yarn too – a move that should widen the yarn price gap that has given Indian garment factories a competitive advantage.

Angered by India's stance, other textile exporters are also attacking each others' trade policies. India, Bangladesh, Vietnam and Peru have forced the WTO to reject EU concessions for Pakistani apparel and textile products. And Pakistani weavers are now lobbying their government to ban cotton and yarn exports.

Source :http://www.just-style.com/the-just-style-blog/indian-cotton-curb-sparks-protectionist-stance_id1918.aspx

India likely to reduce exports of cotton on reduced output

SME Times News Bureau | 13 Dec, 2010

Owing to unseasonal rainfall in the main cotton producing regions, India, the world's second-biggest grower and exporter of cotton, may miss its earlier estimate.

According to D.K. Nair, secretary general of the Confederation of Indian Textiles Industry (CITI), output in the year started on October 1 may be 29.5 million to 30 million bales of 170 kilograms each, compared with 32.5 million bales estimated by the Cotton Advisory Board.

"There's a near-consensus that the crop will be below 30 million bales this year after the unseasonal rains and floods in some areas," Nair said. "A lower crop should prompt a review of the surplus availability and the export strategy."

A lower crop may prompt India to retain restrictions on exports, bolstering global prices that have rallied 72 percent this year. Cotton reached $1.5195 on November 10, the highest price since trading began 140 years ago, as adverse weather damaged crops in China, Pakistan and the US.

India's textiles ministry on October 11 halted registration of new export contracts after it got applications to ship 5.5 million bales, the maximum permissible this year. Louis Dreyfus Commodities, the top trader of cotton, and Cargill Inc. are among companies that won permits.

Meanwhile, there may not be more than 3 million bales available for export as rains last month in Gujarat, Maharashtra and Andhra Pradesh, the biggest growers, damaged crops, Nair said. Shipments may total 2.5 million bales, less than 5.24 million bales permitted by the Textiles Ministry for export by December 15, Nair said.

The South Asian nation, a major supplier of cotton to China, will cap shipments of yarn at 720,000 metric tons in the year started on October 1 to bolster domestic supplies, the government said last week.

"There has to be some predictability about government policy related to cotton," Nair said. "Any review of export policy should be based on actual crop size," he added.

Source :http://smetimes.tradeindia.com/smetimes/news/top-stories/2010/Dec/13/india-likely-to-reduce-exports-of-cotton-on-reduced-output62452.html

Cotton exports less than half of registrations

13/12/2010

New Delhi, Dec 13 (PTI) Exporters have managed to ship out only less than half of the permitted 55 lakh bales of cotton, much to the relief of the domestic textiles industry which has been opposing the outward shipments tooth and nail.
The exports were allowed from November 1 and the entire quantity of registered 55 lakh bales was to be shipped out by December 15.
By now, only about 25 lakh bales have been exported and the government has to decide at the ministerial level whether to allow extension of time, Secretary in the Textiles Ministry Rita Menon told PTI.
Finance, Agriculture, Commerce and Textiles ministers are expected to meet within this week to take a decision on the extension of the time for cotton exports.
Menon said the government would also examine whether all the registrations were genuine.
"First, we are going to see what are the valid registrations. We will see the gaps, then we will have a policy decision," she said.
When the government had decided in September to allow cotton exports in the current season (October-September), the textiles industry was up in arms against the move, stating high raw material prices would harm it.
The industry in clusters like Tirupur went on a day long strike against these exports on November 19.
However, the Agriculture Ministry pushed for cotton exports saying farmers'' interest should be safeguarded.
The commodity prices in India have witnessed a rise of about 89 per cent in the fast few months, according to the government estimates.
This is despite projections of a record production of cotton at 325 lakh bales in 2010-11 against the estimated demand of 266 lakh bales.
Apart from fixing a threshold on cotton exports, the government has also imposed a cap of 72 crore kg on cotton yarn exports this fiscal to help the domestic textiles industry in view of rising prices in the global market.
According to industry sources, prices of cotton yarn have increased by about 85 per cent in the last nine months.

Source: http://news.in.msn.com/business/article.aspx?cp-documentid=4692338

India textiles secretary : to review despatches before extending cotton export deadline

Published on 2010-12-13 14:20:51

New Delhi - India will review cotton despatches already made before deciding whether to extend a Dec. 15 deadline for the export of 5.5 million bales, Textiles Secretary Rita Menon said Monday.

"First, we are going to see how much has been exported and then what is the gap between export registration and actual exports," Menon told reporters.

India permitted the export of 5.5 million bales of 170 kilograms each in the current marketing year that started Oct. 1, and traders booked the entire quantity within days of the government opening compulsory registrations for shipments.

India, the world's second-largest cotton exporter, is expecting a cotton crop of 32.5 million bales in 2010-11 due to higher plantings. Indian traders are hoping to cash in on soaring international prices due to a shortage in key producers such as China and Pakistan.  

Source: http://www.moneycontrol.com/commodity/comm_news.php?autono=140453&type=MKT

ASDE Updates: Global Cotton Consumption Seen Down

Capital Market / 10:51 , Dec 11, 2010

As per the latest release from World Agricultural Supply and Demand Estimates by USDA, world cotton Production is raised nearly 300,000 bales, as increases for Australia and Brazil more than offset decreases for Pakistan, Uzbekistan, Greece, and the United States. World consumption is reduced based on lower estimates for Pakistan and India, partially offset by an increase for the United States. World trade is down slightly, despite higher world production, as most of the larger southern hemisphere production will be shipped in 2011/12. World stocks are now forecast at 43.4 million bales, marginally below the beginning level.

U. S Cotton Production is reduced 150,000 bales, as lower production in Texas is partially offset by an increase in the Southeast. Domestic mill use is raised 100,000 bales, based on stronger-than-expected consumption in recent months. The export estimate is unchanged. Ending stocks are now forecast at 1.9 million bales, or 10 percent of total use. The forecast average price received by producers of 76 to 86 cents per pound is raised 2 cents on the lower end of the range.

Source :http://www.indiainfoline.com/Markets/News/WASDE-Updates-Global-Cotton-Consumption-Seen-Down/3440879211