Posts Tagged ‘Cotton’

COTTON…. “The soft, fluffy plant doing a great job”

China becoming export-oriented &‘hungering’ for most commodities for their industries at an alarming rate has been the main driver for high and increasing cotton prices.

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Cotton season 2009-10

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To start with the some statistics of current season 2009-10, the Cotton Advisory Board, in its recent meeting held on 8th April 2010 has placed the cotton acreage in the country during 2009-10 to 101.71 lakh hectares as against the acreage of 94.06 lakh hectares during the previous year. However, due to the vagaries of monsoon (irrigation coverage is 63%) & severe pest attack, cotton production in the country during this season has been revised downward from the earlier estimate of attack, cotton production in the country during this season has been revised downward from the earlier estimate of 295.00 lakh bales to 292.00 lakh bales as against cotton production of 290.00 lakh bales in the previous year.

Quantity in lakh bales of 170 kgs each Source: Cotton Advisory Board vide its meeting dt.08-04-2010

Arrivals scenario

As per the latest release by Cotton Corporation of India (CCI), cotton arrivals in India’s local markets were up by 3.3% to 27.90 million bales during the October- April period.

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Cotton Season 2010-11

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Assuming normal 2010 monsoon, India’s cotton production may increase by over 6% to a record 25 million bales in 2010-11 season, acc to the US Department of Agriculture. Productivity is also expected to rise by 6 per cent at 528 kg per hectare in the next season.

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Cotton mill use in 2009-10 rebounded faster and stronger than expected after a sharp drop in 2008-09 caused by the global financial and economic crisis.

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•Cotton ending stocks, a measure of available supply, for the current 2009- 10 year will drop by 43.35% to 40.5 million bales.

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Government Intervention

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In order to check the rise in prices of raw cotton in the domestic market, the government of India has imposed a duty on the export of the commodity. Apart from this, the Centre has also decided to levy a 3 per cent duty on cotton waste exports. An export duty of Rs 2,500 a ton is imposed export duty of Rs 2,500 a ton is imposed from April 9, 2010.

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The Deep Impact….

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•Ban on cotton exports has forced Pakistani buyers to look for alternative supplies.

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•Pushed cotton prices in New York to a two-year high on concern reduced exports from the nation may worsen tight global supplies.

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Global Scenario

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•World cotton production is forecast up by 13% in 2010/11 to 24.8 million tonnes, driven by high cotton prices.

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•World cotton mill use is expected to continue to recover in 2010/11, growing by 2% to 24.8 million tonnes, pushed by continued improvement in global economic growth but limited by high cotton prices.

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•World cotton trade is expected to increase to 7.7 million tons. Global cotton ending stocks are expected to remain stable in 2010/11. Global cotton stocks are expected to drop by 18% to 10.4 million tons by the end of July 2010, the smallest level in six years.

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•U.S. cotton plantings are accelerating, reinforcing expectations for a bumper crop following a wet winter in the big producing states. The U.S. cotton crop was 26% planted in the week to May 2, up from 16% the week before and slightly higher than the five-year average of 25% for this time of year, according to the latest data from the U.S. Department of Agriculture.

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Optimistic Outlook for Cotlook

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The continuous increase in Cotlook index was driven mainly by a rising gap between declining production and recovering consumption. The Cot look A Index jumped to over 90 cents per pound in the last part of April, after the Indian government announced the suspension of cotton export registrations and requested that cotton exports already registered, but not yet shipped, be revalidated, with a monthly  cap on revalidations to be determined.

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Conclusion

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To sum up, cotton futures last week declined in New York, but physical prices remained at a very high level on the international market irrespective of stronger U.S. dollar index. In absence of Indian exports, an expected short-supply is increasingly looming, especially for higher grades. Cotton prices will sustain its rally on back of shrinking stocks and non- availability of fine lint besides arrival of new cotton lots not before July 2010.

Govt Sells 0.3 Million Tonne Wheat in Open Market

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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Govt Sells 0.3 Million Tonne Wheat in Open Market

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Govt Sells 0.3 mt Wheat in Open Mkt:

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The government’s move to sell excess wheat stocks to bulk buyers for reducing retail price of wheat and wheat flour finally taken off after months of delay.

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Private bulk buyers have purchased 0.3 million tonne (mt) of wheat under the Open Market Sale Scheme (OMSS) from Food Corporation of India (FCI), till now.

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It marks a substantial amount given that less than 50,000 tonne were bought by bulk users ever since the scheme was launched in October 2009.

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Besides this, another 0.54 million tonne of wheat has been approved for sale to bulk users by the high-level committee set up to oversee the sale of government wheat.

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In Other major Commodities Updates we can read about Government officials lauding BT cotton for generating higher yeild.

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Govt official lauds Bt cotton:

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Genetically modified cotton — commonly termed Bt cotton has been a blessing, according to a senior government official.

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The country has generated an additional income of Rs 10,000 crore to Rs 12,000 crore annually because of its higher yield, J N Singh, joint secretary in the Union textiles ministry, told Business Standard.

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According to official figures, 80 per cent of the overall cotton crop is from Bt seeds.

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The area under Bt cotton has been growing between four and five per cent a year, more so in region with irrigation facilities.

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Bt cotton is, however, unlikely to replace conventional cotton completely, especially in rain-fed regions like Vidarbha, Singh added.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Global cotton output may rise over 8%: ICAC

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the globe.

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Global cotton output may rise over 8%: ICAC

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Global cotton output may rise over 8%: ICAC


Cotton production world-wide is likely to rise by over 8% in the 2010-11 season on higher output in the US and China following high prices, a global cotton body says.

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The global cotton production in the 2010-11 season (October-September ) is projected at 24.1 million tonnes (mt), up 8.5% from 22.2 mt estimated for the ongoing 2009-10 season.

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Above figures were put forth by the International Cotton Advisory Committee (ICAC).

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According to ICAC, cotton production in China is likely to surge by a million tonne to 7.7 million tonne, while in the US it may climb by one tenth to 3 million tonne.

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However in India, production estimates are not changed much from 2009-10 season, it said.

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ICAC had earlier said that India is estimated to harvest 5.3 mt of fibre in this season.

Currently, harvesting is in progress across the country.

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In Other major Commodities Updates we can read about the news of fertiliser ministry urging the finance ministry to release the due subsidy payments and the decline of the natural rubber production rate, last year.

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Fertiliser ministry too seeks subsidy payments:

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The fertilisers ministry has urged the finance ministry to urgently resolve the liquidity problems faced by the country’s fertiliser industry following no payment of subsidy dues by the government since October 2009.

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The demand for subsidy payments comes even as the government is trying to resolve the issue of subsidy to petroleum companies.

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Industry estimates are that subsidy /concession for the October-March 2010 period will be around Rs 30,000 crore plus, bringing up the total subsidy for the fiscal to well over Rs 70,000 crore.

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The centre has allocated only Rs 49,980.25 crore towards fertiliser subsidy for 2009-10 (BE), including carryovers from 2008-09.

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The industry has argued that non-import of urgently needed raw materials and inputs may be jeopardized if the matter of the subsidies is not tackled on priority.

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Making matters worse, according to procedure, the industry cannot expect any further payment until the third supplementary to the Budget due only in end March.

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Rubber Output declines on dry weather:

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Natural rubber production in India, the world’s fourth-biggest producer, dropped 7.3 per cent last year after dry weather lowered yields in the main growing region, the state-owned Rubber Board said.

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The driest monsoon since 1972 lowered latex yield in rubber plantation in the southern Indian state of Kerala, Chandran said.

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Production also dropped because of  intense harvesting and ageing plantations,  Rubber Board Chairman Sajen Peter said on November 4.

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Stockpiles jumped 26 per cent to 261,400 tonnes at the end of December after exports last year slumped to 14,752 tonnes from 77,004 tons in 2008.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Seasonal Index – “Time is Money” Final Part

Hello Friends here we come up with an extension of our previous blog, “Seasonal Index……“Time is Money” Part 2

In previous Blog, we had touched upon the aspect like analysis part of seasonal patterns in predicting the future prices of the commodity.

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Seasonal Index - “Time is Money” Final Part

In this Blog, we would read about that how an annual average method can be used to generate a seasonal pattern in predicting the future prices of the commodity and seasonal pattern in the year 2009.

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Annual Average Method

The annual average method can be used to generate a seasonal pattern as well as predicting the future prices of the commodity.

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This seasonal price index is derived by calculating the annual average price, and then by expressing the price for each month during the year as a percent of the annual average.

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Here, the data which is used to derive the seasonal price patterns are the monthly prices taken between the year April’2004 & November’2009.

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The monthly indexes over the years are averaged to derive a price index that represents those years.

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An example of the technique is presented in Table 1.

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The seasonal price index table suggests that the index increases from the month of June, the time the buyers enter the market with full potential & reaches the highest till the end of the year.

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In The Year 2009

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The prices movement of this year almost followed the seasonal pattern, except few months.

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The supply constraints of lower output, as farmers opted for cotton, worked as a high base effect for the futures with a flat production figure of 8.5 lakh tonnes in 2008-09.

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The recovery in prices was noticed owing to the unforeseen failure of monsoons & comfortable stocks of 25-30 lakh bags from last year for which guar prices traded higher all through-out the year.

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This commodity created a history as it made a life time high, since the date of launch at national bourse, on reports that the output is estimated at 30-35 lakh quintals, down 62% due to factors like scanty rains in the major growing areas.

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Stronger Rupee along-with volatile Crude oil prices brought some corrections in export earnings from Guargum markets in Europe/US.

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However, upcoming demand for by-products such as churi & korma from international markets kept the millers interested in processing guar.

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In a nutshell, if investors want to spin their money safely & stabilize their net returns, using seasonal Index can prove to be a fair advantage.

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Note : For More Latest Industry, Stock Market and Economy News and updates, please click here

Rising Sugar Prices Threatens to Make Coming Festival Season Bitter :(

Skyrocket prices of Sugar

Rising sugar prices are threatening to make the coming festival season bitter and are causing concerns for many consumers.

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Moreover, in order to meet increasing demand, India will be forced to import sugar in large quantities and this in all possibility will further increase sugar prices.

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However, local production has plunged to 14.5 million tonnes in the 2008-09 with demand at 23 million tonnes, the deadline for duty-free raw sugar imports has been extended by nine months to December 2010.

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Additionally, the government is going to start a fortnightly sale of non-levy sugar with the September quota set at 2.11 lakh tonnes 🙂

This year most deficits have been met by opening stocks and next year they’ll need much larger imports of about 6 million tonnes of raw sugar and 1 million tonnes of white sugar.

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Moreover, nearly 4 million tonnes of sugar have been already purchased by the Indian industry, while India’s sugar shopping spree abroad has sent prices of refined sugar in the global market skyrocketing.

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Additionally, it is said that the world market has recorded a 28-year high and has shot up 60% to $610 per tonne in August 2009 from a level of $380 per tonne in October 2008.

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India Will Import 30% of Its Sugar Following Drought :(

India Will Import 30% of Its Sugar Following Drought

India, the world’s biggest sugar consumer, may depend on imports to meet almost a third of its demand next year as a drought in the major growing regions threatens cane yield.

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Local sugar consumption may total 23 million metric tons in the year beginning Oct. 1  and 30 percent of the supplies will be met through imports.

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India’s production in the season starting Oct. 1 will lag behind the demand of 22 million tons.

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Indian authorities are raiding hoarders to boost the availability of sugar, edible oils and lentils during the August-to-December festival season and cool prices.

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India has set limits on the amount of sugar that traders and institutional users can stockpile as it faces a shortfall in supplies for a second year.

The production of sugar in India during year 2008 and 2009 sugar season has not been adequate to meet the domestic demand of the country.

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India’s dwindling stocks and rising demand have helped raw sugar futures surge to the highest in nearly three decades on prospects of large purchases by the world’s top sugar consumer.

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Weak monsoon rains have further raised supply concerns in India.

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Beside that, there is another Agri Update that Cotton and kharif crop has started arriving in mandis of Punjab and Haryana.

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Although in small quantity, but both the states are hoping to achieve combined cotton output of 45 lakh bales during this year in view of surge in area under crop.

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“As cotton growers have started bringing their crop to grain markets, almost 500 bales per day are arriving in Punjab and 350 bales in Haryana,” traders said.

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The price of fresh cotton is ruling at Rs. 2,550 to Rs. 2,700 per quintal, they said while adding that cotton arrivals are going to pick up in mandis in coming days.

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Cotton crop was the only crop during this Kharif season 2009-10 which has seen increase in its area in both Punjab and Haryana despite the fact that area under other crops such as paddy, sugarcane guar went down considerably due to deficient rains.

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India’s dwindling stocks and rising demand have helped raw sugar futures surge to the highest in nearly three decades on prospects of large purchases by the world’s top sugar consumer.

Weak monsoon rains have further raised supply concerns in India.