MUMBAI(Commoditiescontrol) – Cotton Oil Cake traded higher at the benchmark market Kadi amid improving demand during the week ending 15, April.
Cotton oil cake price declined by Rs 50 at Rs 2,150/100kg in Kadi during the week on account of weak demand from cattle feed manufacturer and stockists.
A trader from Kadi said that cotton seed oil cake prices have been under pressure for more than two months now. The recovery rally in the prices from the November 2016 low of around Rs 1,900 a quintal halted around Rs 2,300 in January.
After consolidating at this level for some time, prices have started to decline since mid February.
Weak demand from cattle feed manufacturers and stockists coupled with an increase in the supply of raw material i.e. cottonseed, pushed the prices lower.
Stockists are still holding a huge quantity of stock with them as they were unable to offload the stock which they earlier bought during September to December period at the higher level. Cottonseed oilcake prices dropped between January to March that prompted them to hold stocks.
Now stockists will give priority to get rid of old stocks and then only they will think of buying cottonseed oilcake at current level.
On the other hand demand from cattle feed manufacturer is as per requirement and most of the cattle feed manufacturers have shifted to other feed alternatives which are available in the range of Rs 1,400-1,600/100kg.
Ginners are also holding a good quantity stock of cotton seed as they did not get the prices they were anticipating and crushing of cotton seed is also in huge disparity due to which demand from crushers is subdued and likely to remain lower in coming months.
As demand for cottonseed is likely to remain weak in near term so some ginners have started liquidating the cotton seed stock.
If cotton oil cake price increases substantially then only demand of cotton seed from crushers is likely to improve.
Price of Cottonseed in Kadi are trading in the range of Rs 2,350-2,400/100kg down by Rs 50 on previous week.
On the other hand Cottonseed oil cake futures prices on NCDEX has declined by nearly 2.50 percent on selling pressure and last traded at fresh three month low.
Coming week cotton cake prices are likely to trade weak due to lackluster demand from both the stockiest as well as cattle feed manufacturer.
(By Commoditiescontrol Bureau; +91-22- 40015516)