Cotton Insights for August 23, 2016

  • Cotton prices witnessed a mixed trend today at the major markets of India amid dismal outlook.
  • Prices were down in the major markets of Rajasthan while upward movement was observed in Punjab and Haryana amid recovery from lower level. Further global cues were also supportive.
  • Mills and spinners buying on a limited basis to meet current requirements whereas Cotton stocks with ginners have almost dried up as they gear up for arrivals of new crop from farmers with better than expected yield this season.
  • Cotton Association of India (CAI) pegged pegged 2016-17 Cotton crop unchanged at 33.8 million bales as higher yield is likely to offset acreage losses. Acreage in the country could fall by around 10% during the current season.
  • CAI projected Cotton exports in 2015-16 (Oct-Sept) at 6.5 million bales, while country has shipped around 6 million bales until July. Imports could be around 1.5 million bales.
  • Cotton sowing in Indian state of Gujarat reported lower by 13.78% at 2.37 million hectares.
  • Cotton outlook will continue to remain bearish with no major movement in price expected until the arrivals of new crop in the month of September and the domestic price needs to fall in order to stay competitive in the global market.
  • India Cotton at present is uncompetitive in the global market and in-case it remain so than exports prospects from the country in the new season 2016-17 (Oct-Sept) likely drop even more. Further, higher prices would also hurt domestic mills and spinners.