India New Season Arrivals as on 11/07/2017

Rate this item
(0 votes)

 

 

Cotton Sowing Report as on 13/07/2017

State wise Arrivals

Central Agri Ministry

(Lakh hact.)

 

2017-18

2016-17

Punjab

03.850

02.560

Haryana

06.560

04.980

Rajasthan

04.900

03.680

Gujarat

19.900

13.650

Maharashtra

31.360

29.910

M. P.

04.880

05.000

A.P.

02.850

02.030

Telengana

13.650

09.410

Karnataka

02.410

03.100

Tamilnadu

00.050

00.030

Other

01.340

00.970

Total

91.750

75.320

 

 

 

 

 

 

 

 

 

 

Domestic Market Summary:

 

Starting from mid-June, most textile mills had reduced their cotton procurement to maintain minimum inventory before the Goods and Services Tax (GST) came into force on 1st July 2017.Since then, the mills have not been able to cover mush cotton due to various reasons.

 

 

1)     Because of insufficient rains in many cotton growing centres of India (parts of Gujarat, M.P., Maharashtra, Telangana, A.P., Karnataka, etc), the sellers were not very keen to off load quality cotton stocked in ware houses. As a result, prices of good quality varieties ruled stronger.

 

2)     Fall in yarn demand since March has weakened the mills purchasing capacity. The situation has worsened post GST as the yarn prices have fallen by Rs 5 to Rs 8 per kg in many counts.

 

 

3)     Mills with lower reserves/lower cotton stocks and high interest burden have started facing cash losses.

 

All of the above may compel some of the mills to cut down on production if the current situation does not improve. Prospects for the new season 2017-18 seem good as of now, but the last quarter of season 2016-17 is going to be very challenging for the mills as the physical cotton stocks in India are quite low. This may put substantial pressure on the closing stocks which is estimated by some supplier groups to be as low as 2-3 million bales.

 

The USDA estimates regarding India’s closing stock are a matter of debate and controversy, In 2015-16, USDA estimated ending socks at 14 million whereas it was actually 3.3-4.3 million bales. Even in 2016-17, USDA has ignored the facts and estimated the ending stocks at 15.67 million bales. Either it is an overlooked error, which is quite unlikely, or it is something more serious and sinister.  COTTONGURUTM would like to ask a simple question to the USDA statisticians, where is the cotton?

 

 

Yarn: EAR Cotton Yarn Update: It is striking how share of Indian cotton yarn in the Chinese monthly imports has come down! From being supplier of 37% of total cotton yarn imports in June 2015, India is now supplying only 8.5%! India is now the third largest supplier of cotton yarn to China, Vietnam being the top supplier capturing 42% of the Chinese market followed by Pakistan at 19% and just above Uzbekistan 7.8%!

 

Readymade Garment (RMG): Matter of concern for India

 

In overall textile trade globally, India has a share of merely 5%, against China’s 39%. In the sub-segment of synthetic fibres, India’s share is just 2%, against China’s 66%.Bangladesh’s garment exports exceeded India’s in absolute terms back in 2003. Today it exports more than $35 billion worth of garments, twice that of India. Even late starter Vietnam overtook India in 2011, and now exports garments worth $32 billion. The fact that these two smaller nations have preferential access to the European Union and US markets is not the only reason to justify their huge lead over India. Their growth in exports has been at 20% per year, against India’s 8%.

 

International Market Summary:

 

 

US:

In 2017, total cotton planted is estimated at 12.1 million acres, 20% above last year. Upland area is estimated at 11.8 million acres, up 19% from 2016. American Pima area is estimated at 252,000 acres, up 30% from 2016.

 

Pakistan:

 

Cotton has been sown on 6.778 million acres against the target of 7.68 million acres. Thus, Pakistan has missed the cotton sowing target by a wide margin of 12 % in the current crop season. Uncertainty of cotton prices, increased sugarcane cultivation in the cotton areas, and shortage of water in cotton sowing areas were some of the main factors responsible for failure to meet the target.

 

 

Cotton crop prospects for the current season (2017-18) are not very bright and the production is expected to remain at around 13 million bales as against the target of 14.04 million bales. The government revised the cotton production target downward and set it at 14.04 million bales for 2017-18, after missing the production target of 14.1 million bales for 2016-17 by around 25 %.

 

 

 

Read 139 times
No result...