MUMBAI (Commoditiescontrol) – Strong demand and concern about crop amid pink bollworm attack to cotton crop in key growing
regions have pushed cotton seed oilcake prices sharply up this season.
Cotton seed oilcake prices so far, this season (Oct 17-Sept 18) rose nearly 24% to Rs 1,675/100kg at the benchmark Kadi market, Gujarat. Prices earlier on December 22, touched season high price of Rs 1,896, but thereafter pared gain by over 11% as buyers turned cautious to procure the commodity at the higher level.
The recent correction in cotton seed oilcake prices was attributed to poor domestic demand due to ample availability of other feed material at very competitive rates, said Saurav Shah, Owner, Bonafide Trading based in Ahemdabad.
He said “Milk prices in key producing states are steady to weak compared with same period last year and thus cattle feed manufacturers or farmers have opted to shift to cheaper substitute like pulses chunni, along with grains, mainly millets (bajra) and maize (makka).”
“There are various other alternatives available and thus consumption of cotton seed oilcake has reduced sharply in major centers,” Shah noted.
Cottonseed oilcake is available in the range of Rs 1,675/100k in Kadi, whereas pulses (tur, chana, urad, moong) chunni and grains (millets and maize) is available in the range of Rs 1000-1425, said Shah.
Furthermore, production of cotton seed oilcake is better than last year despite of disparity in crushing, however crush disparity has narrowed in the recent times, said Shah. The crushers have opted to increase crushing activity in order to get rid of stock as earliest as possible due to expectations of bearish tone ahead, he added.
An Ahmednagar-based trader also confirmed, “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 three month (Oct-Dec) of current season 2017-18 is estimated higher around 24.25 lakh tonnes. Cottonseed oilcake stock in the country is pegged somewhere around 3.60 lakh tonnes, which is sufficient to cater present poor demand.
According to data compiled by CC team, the country has received around 141 lakh bales (170kg each), 40% of estimated production of 350 lakh bales this season, which means that still 60% of cotton is left with farmers.
Ample availability of cotton seed oilcake stock along with other substitutes, lackluster demand is expected to weigh on prices.
.png)
|
Conclusion
Although fundamentals are not very price supportive, but if we study historical spot data of last 5 years (see chart above), it has been observed that prices most of the time during Jan-Jun traded on the higher side. Any upside in prices likely only in case government provide any incentives on export, which has been heard in recent report, otherwise prices are likely to remain subdued amid abundant availability.
Technical Outlook
Technical : Cotton Seed Oil Cake Kadi Spot : Correction Resumes (Full Report)
(By Commoditiescontrol Bureau; +91-22-40015533)
0 Comments 
Post Comment 
