Spot Cotton oil cake market exhibited a subdued tone in the week ended April 22 due to poor demand from stockiest and cattle feed manufacturer. Cotton oil cake price declined by Rs 50 at Rs 2,100/100kg in benchmark Kadi market.
The trade activity was limited as market participants in the physical market were heavily influenced by the bearish trend in futures market. Sellers were persistently quoting a higher price for good quality cottonseed oil cake on anticipation that buyer may purchase at higher level. However, the spot market failed to provide support for the higher asking price due to weakness in the futures market.
Cottonseed oil cake futures prices during the week, on NCDEX has declined by nearly 2 percent on selling pressure and traded at fresh three month low on 19 April 2017.
Stockists are still holding a huge quantity of stock with them as they were unable to offload the stock at the higher levels, which they earlier bought during September to December period. Cottonseed oilcake prices dropped between January to March which prompted them to hold stocks. Until there is a good demand which triggers heavy buying activity, stockiest will not be able to sell the old stocks and thus preventing them from adding new inventories.
Main drivers of the demand – the cattle feed manufactures, have shifted their consumption to the cheaper feed alternatives in range of Rs 1400 – 1600 /100 kg for their mix.
Ginners are also holding ample 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.
Price of Cottonseed in Kadi are trading in the range of Rs 2,250-2,300/100kg down by Rs 100 on previous week.
Coming week cottonseed oil 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)
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