MUMBAI (Commoditiescontrol) - Cotton, the soft commodity, had garnered a lot of attention in yesterday’s (21 April) trading session. The Indian Meteorological Department (IMD) had released its forecast for this year monsoon by saying that the country would receive below-normal monsoon this season. This suggest that the market sentiment can be positive in the long-term.
After this report of IMD, traders and millers have predicted that Indian cotton sowing may get delayed this year. This would result in delay in arrival of next year crop, leading to tight availability of cotton in markets, as per a Karnataka-based trader. Considering all these factors, textile mills and spinners may aggressively source cotton to build up their inventories in the sessions to come.
Further, price difference between the Cotton Corporation of India (CCI) and spot markets has narrowed down, indicating returning of buyers in markets.
International weather forecasters have also predicted considerable impact of El Nino in India for 2015-16 crop year.
The CCI has sold 12,000 Fully Pressed (FP) bales cotton at yesterday’s open auction of 2013-14 cotton season held at Coimbatore. In the auction, the agency sold Ahmedabad S6 cotton of 27MM at Rs. 31,700, 31,900, 32,500, 32,700, 33,000, 33,300. It sold Warangal 29MM cotton was sold at Rs. 33,500. 30MM cotton was sold at 33,800/candy.
At its E-auction yesterday, the government’s nodal agency had raised its bid prices by Rs. 100-400/candy, but sold 39,900 bales across various centres out of 50,400 bales offered to sell earlier in the day. This suggests that demand in cotton is quite good in markets as there is shortage in local markets, prompting buyers to source cotton from the government agency. In Maharashtra, it sold 3,000 bales of 30MM cotton at Rs. 34,700/candy and 1,800 bales of 28MM cotton at Rs. 33,700/candy. In Gujarat, 3,000 bales of 28MM cotton at Rs. 34,200/candy was sold, while 1,000 bales of 30MM cotton was sold at Rs. 34,800/candy in Madhya Pradesh. It sold 3,955 FP bales at Rs. 33,200 in Bathinda to a north-Indian mill. The same buyer had bought 1,300 bales of Punjab premium at Rs. 33,700 and another 2,700 bales of Super at Rs. 32,700.
For today’s electronic auction, CCI has increased its floor prices by Rs. 200/candy in north India and By Rs. 100/candy in central India. It would be interesting to see what would be the response it gets at the end of the day.
“Hereon, market players will have to buy from CCI only, weather directly or indirectly, as there is shortage of cotton in physical markets. Mills are left with little stock and they will have to buy for their long-term requirements” said market sources.
Also, local private traders registered very good business yesterday by selling around 34,000-37,000 bales at market prices. Following this, sellers increased their base prices by Rs. 100-200/candy by the evening session.
In yet another report, the Maharashtra cotton federation MAHAFED had also sold 33,000 bales at at Rs. 33,500 to 34,700/candy, according to local traders.
But then from another view point, the below-normal monsoon forecast by the IMD will certainly add to farmers’ distress. Last year too, the weather forecaster had predicted that rainfall in June-September monsoon season would be 95% of the 50-year average, which is below normal rainfall. Last year’s deficit monsoon and unseasonal rains in the past few months, destroying lakhs of acres of standing crops, have already put the country’s farmers in huge losses.
(By Commoditiescontrol Bureau; +91-22-61391533)
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