Cotton Insights for July 27, 2016

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  • Cotton prices recovered today at the major markets of India as some fresh buying emerged at the lower level.
  • Cotton prices early this month rose to above Rs 5,000 level and now is available at around 4,770, which is far attractive for domestic mills.
  • Prices are bit attractive after recent correction, however, higher prices are still beyond reach of small-medium mills due to disparity in yarn.
  • There is not doubt that supply is very tight, but most of the mills don’t want to buy Cotton at current rates as they are not getting better rates for yarn, and also demand in yarn market is poor.
  • There is still uncertainty about Cotton outlook for the next three month, but sharp fall from hereon unlikely as medium-best quality Cotton from new crop is likely to available only by October-end.
  • New Cotton likely to start from September-end or early October, but the early arrivals contain higher moisture and hence will not be feasible for mills.
  • A government official informed that Cotton farmers in Punjab will not suffer as much as last year from the white-fly infestation as the attack on the crop this year is in a limited area and unlikely to spread.
  • Cotton sowing in Indian state of Punjab so far reported lower by 24%.
  • India likely to require around 6 million bales for the remaining three month consumption.

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