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In Recent weeks International prices have increased with China
expected to Import significant amount from all over the world .
ICAC has cut its production estimate for China by 1.378 Million bales to
28.80 Million bales.
Because
of an increase in import prices there will be less demand for Import to India.
The new crop which is good also make it cheaper to buy in local then to import.
The prices in India should fall in Dec/Jan, the import duty will also be not
reduced. So, mostly long & extra long staple will be imported only by Export
Oriented Units (EOUS) who require specialized quality, which are not available
in India.
We have to wait and watch the market
and see if the International Prices continues to rise
or starts comes down again. Due
to elections round the corner, the Govt. in
India may not take any measures to reduce the prices, as they do not want to
displease the producers. If the International Cotton Prices goes up then the
Consumption of manmade fibres may increase. We also have to see the position in
China which has become a major player in the International Textiles Market.
New York cotton (December) was quoted at 75.31 cents, which is the
highest price in the last five years. The International prices are expected to
remain buoyant because China is expected to import huge quantities of cotton
this season. Cotton production
globally this season will remain below the consumption level, which has resulted
in firm price trend. Cotton yarn export prices are also improving but not in
proportion to the international Cotton prices.
This
year the high price benefit is going to go to the producers as the prices have
increased in the beginning of the season only & so in the next year, the
sowing should be higher.
US
Spot December reached a new
record high of 82.95 US cents, China's import buying may become relatively slow
as the domestic crop moves to market. A comparatively steady demand will
persist, with quality remaining a large consideration. China’s January through
September cotton import were 644303 tons, a huge increase of 577% compared to
same period a year before.
The
Cotlook A Index exploded in October 2003, rising by 13 cents to 80 cents per
pound,
the highest since September 1997. During
the first three months of 2003/04, prices rose by 18 cents and averaged 66 cents
per pound. The sharp increase in world cotton prices during October 2003 was
caused by an abrupt reduction in the production estimate of China (Mainland),
resulting in a large increase in projected net imports by China (Mainland) in
2003/04 stated I.C.A.C. in its report.
Cotton
production in China (Mainland) is now estimated at 5 million tons, 400,000 tons
less than projected at the start of October.
Adverse weather in China (Mainland) caused yields to decline to an
estimated 1,000 kilograms of lint per hectare in 2003/04, or 15% less than in
2002/03. The reduced estimate of cotton production in China (Mainland) was
mostly offset by increased estimates of production in Brazil, other countries in
South America and West Africa. World
cotton production in 2003/04 is still projected to reach 20.1 million tons, or
800,000 tons more than in 2002/03.
However,
world cotton consumption in 2003/04 is being affected by rising cotton prices,
and the estimate for 2003/04 was reduced by 400,000 tons during October 2003 to
20.8 million tons, unchanged from 2002/03.
Cont.....
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