Jaipur (Commoditiescontrol) - Cotton seed cake prices are expected to add Rs 100-150/100kg in near terms due to the shortage of the commodity. The warehouse inventory levels have sink sharply lower. Further, the expectations of late new crop arrival due to delayed rainfall in major cotton producing states is further adding pressure. Cotton cake prices are likely to find support from low availability of cotton seed amid fresh demand being generated from August. However, sharp rise in prices is unlikely given the fact that cotton seed cake are already ruling firm.
“There is acute shortage of cotton seed cake these days as current position of stocks at Adilabad is not even 500 trucks while it finds usually 1,500-2,000 trucks during this period, said Gopal Darak, a trader from Warangal city of Telangana, dealing in cotton seed cake. Similarly, stocks remain 1,500 trucks at Bhainsa but this year there would be hardly 400 trucks, he added. According to Darak, “All major cotton producing regions, except Marathwada in Maharashtra, have received rain which will help cotton crop but everything will depend on sowing data and yield in new cotton crop.” Rise in cotton seed prices is of course due to shortage of stock. Usually, prices remain under pressure with arrivals of new crop. Hence, it is too early to assume market trend at higher prices but cotton seed prices may advance by Rs 100-150/100kg given the current shortage of stocks. Cotton seed is trading at Warangal at Rs 900-925-950 and cotton seed cake is at Rs 1,850/100kg.
Kailash Garg, Chief, Kailash Cotton factory Bathinda(Punjab) said, “It appears a bullish trend in cotton seed cake would continue due to shortage of stocks and good quality of cotton seed is available only in Karnataka while next crop is likely to be delayed after recent spell of rainfall.”
The available stocks of cotton seed is very thin as compared to its demand, which is expected to rise further, as inquiries from cattle feed sector is growing faster with increasing number of milking animals. Regular cotton seed cake was sold at Rs 2,470/100kg at Bathinda and premium quality was at Rs 2,550/100kg inclusive of tax. Garg believes that prices will gain Rs 100 and further jump is expected in August as demand rises. It should be noted that cotton seed cake remains around 39 lakh tonnes in the country. As per estimate, after meeting the seed requirement, around 32-33 lakh tonnes of cotton seed is used for crushing and extracting cotton seed oil from which four lakh tonnes of oil is extracted and a byproduct cotton cake is obtained around 28-30 lakh tonnes. The cake is used as a cattle feed.
On-going kharif season cotton acreage has been recorded nearly 93.24 lakh hectares and sowing is still continuing and it is expected that total acreage will be around 110-115 lakh hectares while last year sowing area recorded was 126 lakh hectares. Cotton production is expected to remain around 360-365 lakh bales while previous estimate was at 390 lakh bales.
(By Commoditiescontrol Bureau; +91-22-40015533)
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