Cotton Insights for July 22, 2016

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  • Cotton prices gained today after witnessing down trend in last couple of days as some fresh buying emerged at the lower due to tight supply-demand balance sheet.
  • The recent correction in prices attracted mills to source Cotton for their requirements, however demand is only as per requirements.
  • India Ratings and Research stated that Cotton prices, which have shot up by over 35% since May 2016, unlikely to come down sharply till the arrival of new crop from October despite state-run CCI’s efforts to offload its stock in the market to contain prices.
  • The fall in domestic production has spiked Cotton prices, which are likely to remain at a high level of Rs 120-127/kg till the Cotton season ending September.
  • The rise in prices is expected to squeeze profits of ginners and spinners by over 15 per cent in the current fiscal.
  • Cotton prices are expected to be under pressure on likely fall in acreage.
  • Cotton acreage has taken a beating owing to the monsoon’s delay in reaching Gujarat.
  • The appearance of the pink boll-worm in the early-sown plants has compounded woes and made farmers across the State jittery.
  • Fear of losses from pest attacks, Cotton acreage is likely to decline. This may push up prices further, however increasing demand for man-made Fiber, will contain the price rise.

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