Trade Resources Industry Views Cotton Buying Motivated by Rupee Depreciation in India

Cotton Buying Motivated by Rupee Depreciation in India

Till date nearly 1 crore bales have arrived in the market and approximately 2.75 crore bales are yet to arrive in the Indian market. Mills and exporters are cautiously procuring cotton considering the financial tightness in the market.

The fall in the rupee to the dollar has motivated the exporters and the Textile Mills to continue buying cotton cautiously as the international markets are sluggish. The cotton lint prices kept a steady to firm trend. Farmers were quite cautious to move the seed cotton to market and hold the stock instead of rushing to mandis since they expect more price support. Farmers group started monitoring even global supply situation and China strategy in particular.

As per ISCI, 95% of Indian Cotton are of Bt seeds. More young and women Farmers were attracted to BT cotton Technology. Shri. Sharad Pawar, Hon. Union Agriculture Minister speaks full support to Bt technology as majority farmers gained in yield and cost on Bt Cotton cultivation.


Cotton lint prices remained stready trend with a uplook of firm tendency. Seed cotton arrivals are continuing on an average quantity of 16000 bales a day. Weather during this fortnight is reported to be normal with winter fog etc. Plants so far are healthy with no pest attacks. Farmers and Ginners hold stocks as they expect more price per maund.J.34 roller ginned ruled Rs.3850 to 4100 spot per maund.


From the beginning of this month, till date, daily arrivals in Gujarat picked up from about 60,000 bales a day to 65,000 bales, out of total All India arrivals of around 1,98,000 bales. Price of S.6 was consistently ruling around Rs. Rs.39,000/cdy spot, throughout this fortnight. As mentioned, during the last fortnight report, daily arrival of S.6 kappas was, less in quantity when compared to the same period last year, due to Farmers reluctance to sell at around Rs.960 per Maund ( Rs,4,800 per Qtl), anticipating Rs.1,000 per maund (Rs.5,000 per Qtl).

The steady trend in S.6 rates, were attributed due to this factor, besides Export demand noticed on day to day basis. The arrivals are quite good and both Mills and exporters are actively procuring as per their immediate requirements. Daily kappas arrivals have touched 65000 bales. The prices for good quality S-6 is Rs.39,500/- Spot per candy. North Mills are actively procuring at the moment.


The Farmers are reluctantly bringing kappas in the market because farmers here want a price of Rs.6000 per quintal and considering the sluggishness in the Textile industry, the government is helpless to increase the kappas prices as the quality too is not upto the mark with many areas in Marthwada is facing low micronaire problems. The prices for good quality cotton of Maharashtra Mech-1 is Rs.38,800/- Spot per candy


In M.P, MECH.1-30mm (HVI) were ruling around Rs.38,900 to Rs.39,200 /cdy spot. As for as DCH.32 Crop is concerned, prices started moving up from Rs.58,500 to Rs. 66,500/cdy spot, due to continuous buying by both by local Mills as well as exporters . As on 15.12.13, export enquiry was reported at 142 cts/lb CIF against Ginners demand of 147 Cts/ lb CIF, Bangla Desh Ports. Indian mills are hesitant buyers of MP DCH.32, due to high micronaire observed at around 4.0 which is unusually high, even though Staple length, G.Tex is better than last season.

According to Ginners point of view, this year, DCH.32, seeds sown are different and better than last season The quality in this region is very good and is consistently in good demand from many of the Mill consumers. The price for good quality bunny is quoted at Rs.39,000/- Spot per candy and good quality Dch-32 is priced at Rs.65,000/- Spot per candy.


The arrivals are poor in Andhra Pradesh as farmers are unhappy with the prevailing prices and unfortunately due to the Telangana problem, government decisions are stagnant. CCI is refusing to buy the rain damaged cotton at prevailing kappas prices due to poor quality. Good quality Bunny cotton in Adilabad is sold at Rs.39,000/- spot per candy, while in Warangal good quality bunny is sold at 39,500/- Spot per candy and good quality Mcu-5 in Guntur is sold at Rs.40,000/- Spot per candy .There are still yellow stains prevailent in the present cotton  arrivals.


The kappas arrivals are good in this region as many Mills are actively buying here as per their requirements as quality is good in all aspects. In Raichur region micronaire value of the cotton is high and range between 4.5 to 5.The price quoted for good quality 30mm bunny in Raichur and Hubli of micronaire value 4 is Rs.39,200/- spot per candy while 31mm Bunny is sold at Rs.40,500/-spot per candy.The prices of good quality Dch-32 is Rs.68,500/- Spot per candy.


Mills buying trend continued on need based expecting further fall in cotton lint prices. Since the future demand is strong enough, weakening of prices may not happen. Bulk buyers started procuring, though quality variations are rampant. Seed cotton arrivals have started picking up and winter weather is conducive. Flowering began in southern tracks of Virudhanagar, Madurai etc.

Plants are in in lesser height and hence yield may be less in this belt as per farmers whom we met. Sucking pest attack and untimely rains affected the quantity and quality in other belts as per field supervisors. Texfair 2013 with Farm to Fiber expo organized by SIMA during 13-16 Dec.13 was well participated by business visitors and Farmers groups. SIMA -CDRA arranged a seminar on 14.12.2013 by cotton experts.

ICF secretary, Sri.A .Ramani and Vice President Sri K.N.Viswanathan also made presentations. Scientist from TNAU/CICR/CDRA along ICF-CE addressed Farmers group also on Cotton precision farming. ICF at its stall made video display of use of Mechanical Implements from land preparations to cotton picking with clean cotton.


World cotton prices started firmed up and upward trend prevailed with newyork prices moving @ 83 cents per lb and A index @ 88.40 on 12.12.2013.India plans to have an ambitious textile export target of $50 billion in 2013/14 against $34 billion in 2012/13. China and Bangladesh competition are being monitored with flexi strategy. In Pakistan cotton production may be lower in 2013-14 due to floods, water shortages and lower prices as per reports.

Last season production was reported as 12.336 million bales as per CCAC. In China 173000 tonnes of cotton was imported in Nov.2013 which is more than OCT.13.Prices were steady. But China may import from India as cotton prices are favourable to them. Cotton production is 6.3 million tones in China in 2012-13 and projected area of cotton 66 million mu for 2013/14.Chinas cotton policy on stock/imports etc will rule the Global cotton prices as per reports.

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Rupee Depreciation Motivates Cotton Buying in India