Cotton Market Bulletin ( 24 Decumber)

MARKET OUTLOOK

India & International Market Highlights:

  • The farm agitation against the contentious agricultural laws has taken its toll on the procurement of cotton in Punjab this season. Even as cotton procurement had begun early this season and the Cotton Corporation of India (CCI) purchased a record volume of the produce till the second week of November, the procurement has registered a sharp decline after that.
  • In the futures market, cotton for December delivery touched an intraday high of Rs 20,430 and an intraday low of Rs 20,320 per bale on the MCX.
  • Beginning next year, the Government of China will marginally reduce sliding tariffs on cotton cargoes imported under additional quotas, the finance ministry said.

North Zone:

Cotton traded steady tone across major spot market of north India on Friday. Prices were quoted up by Rs 05-10 per maund. Today weather clear. New crop ready delivery – In Punjab, cotton traded at Rs 4,350-4,380 a maund. In Haryana, it offered at Rs 4,330-4,360 a maund while in Upper Rajasthan, cotton quoted at Rs 4,330-4,370 a maund.

Central Zone:

Cotton spot prices steady tone across west India market on Friday. Gujarat weather clear, Sankar-6, 29 mm (10% Moisture, RD-75 & MIC-3.8), new crop good quality in Gujarat traded at Rs 42,000-42,500 a candy and 28.5mm (Average Grade) quoted at Rs.41,000-41,500 a candy. V-797 sold at Rs 26,300-26,800 (13% trash condition) a candy. While in Maharashtra, new crop good grade cotton (30mm) quoted at Rs 43,000-43,500 a candy.

South Zone:

Cotton spot price was steady tone across the major trading centers of south India.

Pakistan :

Trade activity remains bullish on cotton market: 24 Dec 2020 – KARACHI: The local cotton market remained bullish on Wednesday. Market sources told that trading activity was satisfactory. Cotton Analyst Naseem Usman told that Ministry of Commerce, after revising the initial draft, has finally submitted the Textile Policy 2020-25 to the Economic Coordination Committee (ECC) of the Cabinet for approval. As per the proposed policy ministry proposes incentives worth Rs 900bn. Naseem also told that textile exports of Pakistan seem to have stabilized substantially from the Covid-19 pandemic shocks and are still increasing. Recent monthly data released by the Pakistan Bureau of Statistics for the first four months of the current financial year shows that exports of textiles and garments are back on a pace of growth in terms of both supply and market price. The statistics show that between July and October, textile shipments rose by 3.8% to $4.8 billion from $4.6 billion a year earlier. The increase in the textile and clothing group was a week faster than the overall export rise of 0.6pc. In the knitwear, home textiles and denim categories, the export recovery is most pronounced. Naseem further told that this year especially 200,000 bales will be imported from Afghanistan. Moreover, Phutti in abundance is also coming from Afghanistan. Sources told that Phutti equivalent to 10, 000 bales has reached Pakistan. Phutti in few factories of Dera Ghazi Khan were coming from Afghanistan but this year Phutti in abundant quantity from Afghanistan has arrived in ginning factories of Punjab, Sindh and Balochistan. Seed companies are buying banola of Afghani cotton from ginners which will be grown locally in coming season. Naseem told that 400 bales of Ubaro were sold at Rs 10,000 per maund, 200 bales of Adil Pur, 400 bales of Ghotki were sold at Rs 10,000, 800 bales of Dherki were sold at Rs 10,000 to Rs 10,200, 400 bales of Saleh Pat were sold at Rs 9800, 800 bales of Khan Pur were sold at Rs 9600, 1400 bales of Rahim Yar Khan were sold at Rs 10,0000 to Rs 10,200, 800 bales of Sadiqabad were sold at Rs 10,000 to RS 10,200, 400 bales of Kot Sabzal were sold at Rs 10,200, 800 bales of Fort Abbas, 100 bales of Yazman Mandi were sold at Rs 9800, 800 bales of Bahawalpur were sold at Rs 9500 to Rs 9800, 600 bales of Haroonabad were sold at Rs 9700 and 600 bales of Shujabad were sold at Rs 9600. The Spot Rate remained unchanged at RS 9950 per maund. The price of Polyester Fiber was increased by Rs 5 per kg and was available at Rs 173 per Kg.

China :

China to reduce sliding tariffs on cotton cargoes: 25 Dec ’20 – Beginning next year, the Government of China will marginally reduce sliding tariffs on cotton cargoes imported under additional quotas, the finance ministry said. Further, the number of products that can be imported under temporary import tariffs, which are lower than the most-favoured nation tariffs, would be increased from 859 to 883, beginning January 1. The reduction of sliding tariffs would lower cost of importing cotton fibre into China. In addition, the most-favoured nation rate, conventional tariff and provisional tariff on some commodities would be adjusted from January 1, the Customs Tariff Commission of the State Council said. For the next phase of economic development, the government would adopt a ‘dual circulation’ approach, relying mainly on ‘domestic circulation’, supporting innovation and upgradation in local manufacturing, distribution and consumption cycle, the ministry said. China’s ‘dual circulation’ strategy, unveiled earlier this year, refers to the parallel emphasis on domestic and global circulation.

COTTON & TEXTILES NEWS :

Cotton procurement hit: Bathinda, December 24, 2020 – The farm agitation against the contentious agricultural laws has taken its toll on the procurement of cotton in Punjab this season. Even as cotton procurement had begun early this season and the Cotton Corporation of India (CCI) purchased a record volume of the produce till the second week of November, the procurement has registered a sharp decline after that. Firstly, it was the farm agitation around a month ago that affected the procurement and now, the four-day strike by arhtiyas in the state has impacted the procurement of cotton amid the peak season. Data procured from the CCI revealed that while it was procuring approximately 65,000 quintals of cotton on a per-day basis in the state, the daily procurement had come down to approximately 21,000 quintals now. Talking to The Tribune, Neeraj Kumar, CCI general manager and Punjab in charge, said, “We got an overwhelming response initially when the procurement started as many farmers turned up in the market to sell their produce but after the farm agitation and arhtiyas’ strike, the procurement of cotton has got affected. However, farmers who want to sell cotton are directly going to the cotton factories and the procurement by the CCI is underway.” Sources said arhtiyas, in order to muster up support for their strike call, had asked farmers to stay back and not to bring their produce to the mandis. As per the records of the CCI, total 25 lakh quintals of cotton had been procured so far and payment of approximately Rs 1,250 crore was made to farmers this season. Meanwhile, Ruldu Singh, state president of the Punjab Kisan Sabha, said, “The farm agitation will have ripple effects in the coming days. The cotton procurement will remain affected until the Union Government hears out our genuine demands and repeals the anti-farmer laws. We stand firmly with arhtiyas in their call for strike in the state.

Cotton growers await compensation for losses: Hisar, December 23 – Farmers who suffered losses to their cotton crop due to whitefly attack earlier this year are still waiting for compensation from the government or insurance agencies. The farmers said they had submitted a report about the crop loss immediately but were yet to get the grant. Cotton growers have suffered the worst losses in the past five years as whitefly and other diseases have hit the crops hard in the Hisar region, known as the cotton belt of Haryana. The state has a record 7.38 thousand hectares under cotton this kharif season. The state government had ordered a special girdawari after farmers demanded it to assess their losses and calculate compensation. Sandeep Singh, a farmer of Dhiranwas village in Balsamand region, the worst affected area due to whitefly, said so far they had not received any compensation from the government. He said he had sown cotton in six acres and was able to reap only two to three quintals cotton per field. “The average cotton yield is about 10 to 12 quintals per acre. We are unable to even recover the input cost, which has pushed many farmers of the region deeper in debt,” Sandeep said. He said though the state agencies had started girdawari for the damage to crops, the farmers were being kept in dark. “The officials are not disclosing anything about the survey report. We have raised the issue with the Deputy Commissioner and urged him to get the five-member committee, comprising of the land owner, nambardar etc, included during the girdawari for transparency in the whole affair,” Sandeep said. District Revenue Officer Rajbir Dhiman said on the instruction of the state government, they were in the process of compiling a detailed report about the crop loss. “We will disburse the compensation amount on completion of the ongoing process of assessment,” he said, adding that the crops which were insured under the Pradhan Mantri Fasal Bima Yojna would be compensated by the insurance firms. Official sources said whitefly has caused losses to cotton crop in Hisar, Fatehabad, Sirsa and Bhiwani districts. The farmers might have suffered biggest ever losses since 2015 when whitefly had destroyed almost 70 per cent of the crop in specific parts of the region.

Steps on to increase per acre cotton production: minister: December 25, 2020 – MULTAN: The Punjab government is taking steps to increase per acre cotton production according to the vision of Prime Minister Imran Khan, said Provincial Minister for Agriculture Hussain Jehania Gardezi. Addressing a reception in his honour arranged by Dera Ghazi Khan Chamber of Commerce and Industry president Khawaja Jalaluddin Roomi here, the minister said that cotton production had been declining for the last many years, which was also shrinking foreign exchange due to increasing dependency on import of cotton. The government had two prime tasks, including saving the foreign exchange by increasing cotton production, he added. The minister said that the textile industry was booming under the better strategy of Prime Minister Imran Khan and the sector was working in two shifts round-the-clock. DGKCCI president Khawaja Jalaluddin Roomi said that the area under cotton cultivation in south Punjab was declining due to the farmers’ shifting to sugarcane crop. At present, the textile sector had to buy cotton from abroad to meet its need, he added. Khawaja Jalaluddin Roomi added that there was no doubt that the federal and provincial governments were sincerely working for the betterment of agriculture.

Cotton futures steady at Rs 20,370 per bale in afternoon session: DECEMBER 24, 2020 – Cotton futures were steady at Rs 20,370 per bale on December 24 as participants trimmed their positions as seen from open interest. Cotton futures in the domestic market climbed 1.75 percent yesterday after touching a low of Rs 19,960 to settle at Rs 20,380 per bale on the MCX. Cotton prices have risen by Rs 500 after a steep drop at the start of the week following the appearance of a new coronavirus variant in the UK. Cotton arrival across the country jumped by 46 percent in the first 20 days of December to reach nearly 5 lakh tons. In the futures market, cotton for December delivery touched an intraday high of Rs 20,430 and an intraday low of Rs 20,320 per bale on the MCX. So far in the current series, the commodity has touched a low of Rs 16,350 and a high of Rs 20,680. Cotton futures for December delivery gained Rs 30, or 0.15 percent, to Rs 20,370 per bale at 15:45 hours IST on a business turnover of 1,276 lots. The same for the January contract eased by Rs 10, or 0.05 percent at Rs 20,600 per bale with a business volume of 3,247 lots. Mohit Vyas, Analyst at Kotak Securities said, “We expect Cotton to continue with marginal profits for near futures as optimism for a vaccine and humongous stimulus package might provide a strong floor to cotton at near current levels” At 10:18 (GMT), US Cotton futures were up 0.25 percent quoting at 76.33 cents/pound on Intercontinental Exchange (ICE).

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