Cotton supply position comfortable – SIMA advises mills to avoid panic buying

 

The cotton price which was ruling around Rs.38,000/- to Rs.39,000/- per candy of 355 kgs during the beginning of the cotton season for the bench marked variety of Sankar-6, is currently ruling around Rs.43,500/- to Rs.44,000/- resulting in an increase of Rs.5000/- to Rs.6000 per candy depending upon the staple length and quality of cotton.    The cotton price that has been increasing steeply till the end of February, has become firm during the last 20 days.  As the gap in the international and domestic prices has narrowed down, now imported cotton appears to be atractive due to better yarn realization, productivity and quality.

 

 

The Cotlook A index that prevailed around 79 cents during October has increased to 87 cents. Currently there is no much difference between domestic and imported cotton prices.  Hence, the import contracts of cotton are gaining momentum.  There is a significant increase in cotton crop size in Australia, expected to be around 45 lakhs as against 28 lakh bales achieved last year and 18% increase in crop size at US.  Since China has restricted its imports, global cotton position is very comfortable.

 

 

            In a Press Release issued here today, Mr.M.Senthilkumar, Chairman, The Southern India Mills’ Association (SIMA) has stated that the spinning mills need not be panic as cotton position both in domestic and global markets are very comfortable. He has stated that the cotton production in India for the season 2016-17 might be around 342 to 345 lakh bales as against 351 lakh bales estimated by the Cotton Advisory Board at its meeting held on 24.10.2016. 

 

 

SIMA Chief has said that the cotton arrival as on March 20, 2017 was around 250 lakh bales as against 260 lakh bales arrived during the same period last year. He has added that CAB had estimated the cotton imports as 17 lakh bales and  felt that it might touch 30 lakh bales during the end of the season if the present trend of import continues.  He further said that the mill consumption might be around 295 lakh bales as against 303 lakh bales estimated by CAB as the average count becomes finer. He has said that the exports might be only around 40 lakh bales as against 50 lakh bales estimated by CAB as the Indian cotton price is not currently attractive in the international market.  He has felt that the exports contracted so far might be only around 30 lakh bales. He has said that currently India has contracted for around 15 lakh bales of cotton imports from West Africa and US. He has opined that the prices might ease once the Australian cotton arrives the market in May. Considering all these facts, Mr.Senthilkumar has stated that the cotton supply position in India is very much comfortable and therefore, suggested the spinning mills to avoid panic buying. 

 

 

            While mentioning about CCI’s commercial activities of cotton, SIMA Chairman has thanked the Hon’ble Union Minister for Textiles and CCI for limiting CCI purchase to only around 1.05 lakh bales as against their original plan of 15 lakh bales and continue to maintain their supply only to the spinning mills.  He has advised the mills to avoid quoting higher price than the floor price for CCI cotton and thereby avoid further increase in the cotton prices.  Mr.Senthilkumar has appealed to all the ginning units to avoid any adulteration and ensure supply of least trash and contamination free quality cotton as the industry and the Union government have been planning to brand Indian cotton and its textile products.

 

 

            Mr.Senthilkumar has stated that the higher cotton price prevailed during the peak cotton season has greatly helped the cotton farmers to realize attractive prices and much higher income than any other cash crop and strongly felt this would considerably increase the area under cotton in the forthcoming season if the monsoon favours.

 

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