Cotton wilts as US report shows higher global stocks

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RAJKOT, MAY 11:

Cotton prices declined by Rs 1,000-1,200 for a candy of 356 kg on Friday in line with the global trend. In the world market, cotton tumbled to a 21-month low after a US government report showed rise in global inventories and data from Asia indicated a slowdown in industrial output.Lower demand from mills and exporters also pulled down prices.

A trader said that prices may decline by Rs 500-700 in next 2-3 days as international reports are not positive and exporters are not buying aggressively.

Gujarat Sankar-6 cotton declined to Rs 33,700-34,000 for a candy. Kapas or raw cotton price slid by Rs 15-20 to Rs 810-815 for a maund of 20 kg in local markets. Kadi delivery kapas traded at Rs 850-855 a maund.About 17,000-18,000 bales (of 170 kg each) arrived in Gujarat and 82,000-85,000 bales arrived across the country.

Cotton traded sharply lower in North India too. Buyers were out of the market after Thursday’s bearish USDA report. J-34 RG quoted at Rs 3,700-3,710 a quintal in Punjab, Rs 3,600-3,625 in Haryana and Rs 3,600-3,610 in Rajasthan.On National Commodity and Derivatives Exchange, kapas for delivery next April declined by Rs 42.50 to Rs 1,024 a maund with an open interest of 1403 lots.

Bloomberg reports: Cotton futures for July delivery fell 3.1 per cent to 79.3 cents a pound at 8:29 a.m. on ICE Futures US in New York, after reaching 77.16 cents, the lowest for a most-active contract since July 2010. Futures declined for an eighth day, the longest losing streak since June 4, 2010.

The fiber has lost 64 per cent since reaching a record in March 2011 as higher prices spurred farmers to boost plantings and demand in China fell. World stockpiles will climb 10 per cent to 73.75 million bales in the season from August 1, the US Department of Agriculture said on Thursday.

Industrial output slowed in China and shrank in India, adding to concerns global growth is slowing as European leaders tackle the debt crisis.If China’s slowing more than expected then it drives the risk-off attitude in commodity markets, said Mr Michael Creed, an agribusiness economist at National Australia Bank Ltd.

Source: http://www.thehindubusinessline.com/markets/commodities/article3409038.ece

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