Cotton Insights for August 11, 2016

  • Cotton prices traded steady to lower at the major markets across the country today in the midst of sustained buying by mills.
  • Cotton suffered losses of Rs 400-500/candy in Gujarat, whereas ruled mostly flat in Maharashtra and Madhya Pradesh including South India on account of lackluster demand.
  • Mills demand for Cotton is steady as they are aware of current tight situation.
  • Cotton production in India expected to hit a seven-year low in 2016-17 because of a reduction in the area under cultivation and pest attacks in top producer state Gujarat, even as domestic prices have started firming up after a poor season.
  • Cotton imports in 2015-16 may have been the highest in a decade and may see a new high this fiscal as the overall area where Cotton has been sown has declined 8.7%.
  • Cotton sowing in Gujarat has touched a three-year low at 2.3 million hectares which is about 19% lower than the three-year average of 2.82 million hectares.
  • Cotton area in Punjab is down by over 25% as compared to its normal area.
  • Higher production in Maharashtra, where weather conditions are looking favorable as of today, is not expected to fully compensate for the fall in Gujarat and Punjab