MUMBAI (Commoditiescontrol) – Cotton seed oilcake prices have been under pressure over the last three months. The correction in the prices started from the 29th December 2017 high of around 1,896 a quintal and last traded at Rs 1,403/100kg, down by 26%. Weak demand from cattle feed traders, coupled with an increase in the supply, pushed the price lower.
The recent correction in cotton seed oilcake price was attributed to poor domestic demand due to ample availability of other feed material at very competitive rates.
Milk price in key producing states of Maharashtra, Gujarat, Punjab, Haryana and Uttar Pradesh is significantly down compared to last year and thus cattle farmers and cattle feed manufacturers have opted to shift to cheaper substitute like pulses chunni, along with grains, mainly millets (bajra) and maize (makka).”
Maharashtra’s cow milk procurement price has declined by 30% to Rs 22/litre compared to last year same month. Procurement prices in Haryana and UP have declined by 28% yoy to Rs26/litre.
“There are various other alternatives available and thus consumption of cotton seed oilcake has reduced by around 30% in major centers, traders said.
Cottonseed oilcake is available in the range of Rs 1,390-1,400/100k in Kadi, whereas pulses (tur, chana, urad, moong) chunni and grains (millets and maize) is available in the range of Rs 1000-1425.
Further production of cotton seed oilcake is better than last year due to higher crushing during start of the season, however crush disparity has increased in recent times due to poor realisation in cotton oil cake prices.
As per traders present demand for cotton seed oilcake is very poor and thus further fall in its prices can’t be ruled out.
Cottonseed oilcake production during the first six months (Oct-March) of current season 2017-18 is estimated around 38 lakh tonnes. Cottonseed oilcake stock in the country is pegged somewhere around 5.20 lakh tonnes, which is sufficient to cater present poor demand.
According to data compiled by CC team, the country has received around 260 lakh bales (170kg each), 74% of estimated production of 350 lakh bales this season, which means that still 26% of cotton is left with farmers.
Market particpant are expecting around Rs 75-100/100kg fall in cotton oil cake prices in short term.
Conclusion: Ample availability of cotton seed oilcake stock along with other substitutes and lackluster demand are expected to weigh on prices. Meanwhile any upside in prices on account of short covering should be used as opportunity to sell.
Technical Outlook
Technical : Cotton Seed Oil Cake NCDEX April (Full Report)
(By Commoditiescontrol Bureau; +91-22-40015533)
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