The Cotton Corporation of India (CCI) reported the current season arrival to 151.41 lakh bale as of now as compared to 182.23 lakh bale in the same time last season.
In the north zone of Punjab, Haryana and Rajasthan, the daily average arrivals are around 15,000 bales. Cotton lint prices remained steady with no major variations.
The cotton market kept prices steady on Tuesday with the fresh buying interest at lower level, where some needy spinners moved in to reload their stocks.
Small millers who are mostly dependent on local supplies are disappointed with the shortage of quality lint. Most millers were keen to build upon their cotton stocks at current prices as hopes that the flow of phutti (seed cotton) would improve are fading.
Floor brokers said that big spinners have already imported around 1.7 million bales, but small spinners with cash flow problem are largely dependent on domestic supplies.
The Erode markets on Friday along with rise in arrivals also witnessed improvement in the Bt cotton prices by Rs.300 a quintal. Higher price were offered by buyers for cotton. However, prices continue to rule lower than last year.
Bt Cotton is cultivated in Kolathur, Kongapuram, Sathyamangalam, Gobichettipalayam, Anthiyur and Namakkal areas. Harvest of the crop, grown in fallow lands after rice harvest, has begun. Sale of cotton in Avinashi and Attur was encouraging, according to M S Subburaman, superintendent of Anthiyur Regulated Market Committe.
Karachi cotton market failed to witness any improvement in trading activities due to which the Karachi Cotton Association (KCA) went down to revise its cotton spot rate by Rs50 per maund to Rs6,900 per maund on Monday.
Traders exchanged a total of 5,000 bales (155 kilograms each) at Rs6,675 to Rs7,100 per maund (37.324 kilograms), the KCA reported.
The decline in the number of orders for purchase of cotton yarn from abroad forced local manufacturers of cotton yarn to stay on the sidelines of the market.
ICE cotton ended its two days of losses as it eked out small gains on Tuesday, while stocks continued to rise as trade buying offset index and fund rolls ahead of the March contract expiry.
The benchmark March cotton contract on ICE Futures U.S. finished up 0.39 cent, or 0.5 percent, at 85.40 cents a lb. Two days of selling had pushed prices to 84.76 cents on Monday.
World cotton production exceeds consumption; this trend is observed over the seasons with a slight twist. In 2010/11, world production exceeded consumption and this trend has continued into this season, though declining production and a slight rise in consumption is closing the gap. In 2013/14, world production is forecast at 25.7 million tons, a decrease of 4% from 2012/13 and 8% from peak production of 28 million tons in 2011/12. This is due principally to lower yields and less area planted with cotton.
Cotton price remained unmoved as a result of normal export and domestic demand. Kapas or raw cotton also traded flat. About 60,000-62,000 bales of cotton arrived in Gujarat and 2 lakh bales arrived across the country.
Gujarat Sankar-6 cotton was quoted at Rs.46,600-46,700 for a candy of 356 kg. Kapas was traded at Rs.1,050-1,085 for a maund of 20 kg and gin delivery kapas stood on Rs.1,085-1,100 a maund in Rajkot.
On the National Commodity and Derivatives Exchange, kapas April contract increased by Rs.4 to Rs.980.50 a maund, with an open interest of 18,037 lots.
The surge in the demand for cotton yarn in the export market and domestic apparel and home furnishing sector, has renewed vigour and confidence of Indian spinning mills this year. On the back of higher exports, the spinners' profitability is increasing while many of them are raising headcounts to full fill increased order flow.
The good monsoon and a better cotton crop may help keeping the price of cotton viable for the industry in the next few months, thus increasing the margins of mills.
Spinners buying interest kept cotton prices at overnight inflated level on Thursday while ginners continued to show reluctance to dispose of their stocks which restricted trading volume. Moreover, from the outset spinners were keen to replenish their stocks ahead of closure on account of strike call on Friday (today
Good monsoon and a better crop size of cotton may help in keeping the price of cotton viable for the industry in the next few months, thereby increasing the profitability of cotton yarn spinning mills.
The spinning mills in India have good potential with the foreseeable surge in demand for cotton yarn in the export and domestic apparel and home furnishings sector.
