cotton presentation

8/3/2019 Cotton Presentation

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Presentedby:ChowdaReddy

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CommoditiesResearchDesk


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Introduction

Cotton - King of Fibres (belongs to the order Malvales,

family Malvaceae)Sowing : June - July, Harvest: September December

Arrivals extend till April

Provides employment to 4-5 million people

ass e ase on re engt1. Short staple

2. Medium staple

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3. Long and Extra long staple


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ClassificationandpercentageshareStaple Length

Short Below 20.0 mm

Medium 20.5 to 25.5 mmMedium Long 26.0 to 27.5 mm

Long 28.0 to 33.5 mm

Extra Long 34 mm & above

Short 3%xtra ong

2%

e um

27%

3

e um

Long

17%

Long 51%


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CottonproductsCotton

Lint (Fibre)Seed

ex e a e

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Seasonalityof

Cotton

Jan Fe Mar Apr May Jun Ju Aug Sep Oct Nov Dec

China

US

India

Pakistan

Brazil

Uzbekistan

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Sowing Growth Stage Harvesting


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USDA estimated out ut in India at 314 lakh bales in 2007-08

Production increased by 35 lakh bales from last year

rea ncrease y . a ec ares o . a ec ares n

2007-08

- - -

Annual output growth rate 10.76% between 1999-00 & 2007-08

Bt Cotton occupies about 40% total cotton area

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IndiaCottonBalancesheetQuantity in Lakh bales2000 2001 2002 2003 2004 2005 2006 2007

Particulars -01 -02 -03 -04 -05 -06 -07 -08

Beginning Stocks 63 48 66 46 54 112 103 94

ro uc on

(Lakh bales) 140 158 136 179 243 244 279 314

Imports 20 31 16 10 13 5 5 5

Total Supply 223 236 217 235 310 361 388 413

Exports 1 1 1 9 8 44 61 78

o a om. ons.Ending Stocks 48 66 46 54 112 103 94 103

Stock to Use % 27.67 38.44 26.85 29.48 56.69 41.42 30.75 27.84

7Source:USDA


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Ma or roducin statesCotton Production share of States

6%

MP 7%

Gujarat38%

ers

7%

Punjab

10%

Maharashtra

19%

Andhra Pradesh

13%

Gujarat Maharashtra Andhra Pradesh Punjab

Madhya Pradesh Haryana Others

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Lakh bales

onsumpt on - - - - - - - -

Mill consumption 149.36 147.00 142.42 150.39 163.98 182.00 194.89 207.00

Small Mill 10.97 11.70 11.63 13.00 16.57 20.00 21.26 23.00

consumption

Non-Mill

consumption

12.70 13.06 14.78 13.71 14.48 15.00 15.88 15.00

Total

consumption

173.03 171.76 168.83 177.10 195.03 217.00 232.03 245.00

Export 1 1 1 9 8 44 61 78

Total disappearance 173.63 172.26 169.67 189.21 204.17 264.00 290.03 310.00

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Sources : CAB


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WorldproductionGlobal production estimated at 152 million bales in 2007-08

down from 156 million bales last yearChina is largest producer and contributes to one-third of total

global output

India and US are other major producers and has share of 36%

India has overtaken US in terms of output during 2007-08

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W rl C tt n B l n h t Million bales(MlnHa) ngStocks Production Imports TotalSupply Exports EndingStocks Stock toUse %

2000/01 32 65 114 34 213 34 63 53.53

2001/02 34 63 126 38 227 37 70 58.08

2002/03 30 70 113 39 222 39 58 46.16

2003/04 32 58 122 44 224 43 57 45.10

2004/05 36 57 156 43 256 45 73 52.78

.

2006/07 35 77 156 48 281 48 78 49.52

2007/08 34 78 152 50 281 50 76 47.54

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Lakh Bales

Country2000-

012001-

022002-

032003-

042004-

052005-

062006-

072007-

08

China 260 312 289 286 397 378 455 448

India 140 158 136 179 243 244 279 314

Pakistan 107 106 102 100 143 130 127 115

Brazil 55 45 50 77 76 60 90 91

Others 358 383 334 344 407 389 337 311Total 1141 1264 1132 1220 1563 1507 1563 1523

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Textile Fibres

Natural

Fibres

Man made

Fibres

Plant (Cellulose) Cotton

Animal(hair.cocoon)

Organic Inorganic (carbon,ceramic & glass)

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CottonTextiles

Cotton accounts for 60% of textile consumptionCotton textiles ex orts Rs.49816 crores in 2006-07

Cotton constitutes 34% of total textile exports

billion by 2012

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CottonTextiles

Man-made Fibre production has almost doubled during1990-2005 to 32 million tonnes, while cotton output

ncrease y o m on onnes

Consumption of Man-made Fibre has increased at an. ,

1.8% per annum between 1960 and 2002

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KapaskhaliSeed separated from cotton is further processed and by-

products are kapas kali (oil seed cake) and oil

Crushing starts from October and extends till June

Oil seed cake (82-85%), oil (12-14%) and wastage (2-

3%)Cake used as cattle feed and oil used for edible purpose

Demand comes from Gu arat and Ra asthan

Most of the oil seed cake consumed domestically

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Domesticscenario

of

Ka as

khali

(QtyinMilliontonnes)

Year Crush Production

Exports

(1000 MT)

Domestic

consumption

2000-01 3.7 1.7 1 1.7

2001-02 3.8 1.8 7 1.8

2002-03 3.4 1.6 2 1.6

- . . .

2004-05 5.9 2.8 1 2.8

2005-06 6.0 2.8 0 2.8

2006-07 6.6 3.1 0 3.1

2007-08 7.4 3.5 0 3.5

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Source:USDA


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NCDEXcontractspecificationsName of Commodity V 797 Kapas

-

Unit of trading 1 lot (200 maunds of 20 kg each i.e. 4 MT)

Quotation/base value Rs. Per 20 kg

Tick size 10 paisa

Trading month Contract for March, April and May expiry next year,

Delivery center Surendranagar (Gujarat)

Delivery Sellers option

MCX contract specifications are similar

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Bandhini contract price limit is Rs.345.10 Rs.505.10


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ShankarKa as

contract

s ecifications

Name of Commodity SHANKAR Kapas

Ticker Symbol SHANKRKPAS

Basis Average of spot prices of the following stations

Rajkot, Gondal, Kadi, Vijapur (Exclusive of VAT)Unit of trading 1 lot (200 maunds of 20 kg each i.e. 4 MT)

e very un t ot maun s o g eac .e.

Quotation/base value Rs. Per 20 kg

Tick size 10 paisaQuality specifications Raw Cotton

1. Staple Length

Basis : 28.5-29 mm

Deliver center Ra kot and Kadi Gu arat at Par

Additional Delivery

centers

Goods meeting contract specifications may also be delivered at Guntur

and Akola. The locational Premium/Discounts for Akola and Guntur will

be announced before the launch of the contracts.

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Position limit Member: Maximum of 75,000 MT for all contracts

Client: Maximum of 15,000 MT for all contracts


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NYBOTCotton

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22,000

,

dy

18,000

,

PriceperCa

12 000

14,000

,

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept

2003-04 2004-05 2005-06 2006-07

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Source:CottonCorporationofIndia


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CotlookIndexAThe COTLOOK A INDEX is representative of the level of offering

prices on the international raw cotton market

It is an avera e of the chea est five uotations from a selection

Monthly Average Cotlook A Index80

(currently 19) of cotton traded globally

70

50

60

40

Augu

st

tembe

r

Octob

er

ovembe

r

ecembe

r

Janu

ary

ebruary

March

April

May

June Ju

ly

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S2004-05 2005-06 2006-07 2007-08

In US Cents per lb


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CotlookIndexA

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NYBOTCottonCents per Lb

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KapasNCDEXAprilcontract

25Supports 505, 485 and Resistance 545, 570


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NCDEXCocudMaycontract

26Supports 377, 334 and Resistance 476, 500


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Factorsto

be

watched

out

Global cotton output estimated at 152 million bales during 2007-08

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Cotton output India estimated at 314 lakh bales in 2007-08 higher than279 lakh bales in 2006-07

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likely to touch 10 million bales (already 78 lakh bales exported)

Strong export demand seen from China and Pakistanrr va s o co on ec ne o e ow one a a es rom . a

bales in December

Current arrivals are around 80000 bales

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Factorstobewatchedout(contd)

Correction between NCDEX Kapas and NYBOT Cotton: 0.8NCDEX and MCX have contracts for V - 797 variety, but it has less

an o o a co on ou pu

Factors influencing the prices

Production (both domestic and global)rr va s n omest c mar ets

Exports from India

Global prices (NYBOT and Cotlook A Index)

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PriceoutlookCotton prices have moved up by Rs.170 per 20 Kgs (NCDEX

April) and Kapas khali prices also moved by Rs. 120 per 20

kgs (NCDEX March) in the last 3-4 months

o a cotton pr ces ma e years g o cents per

Prices are likely to take some correction in near term

output

-.

term

Ka as khali rices ma touch Rs.1000 er uintal in 4-5

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months


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