MARKET OUTLOOK

India: Market is overall bullish, yarn prices has also gone up both in domestic as well as in exports. ♦ US Cotton Futures: Cotton put in a wild performance last night. The market traded lower by 263 pts early, but staged a recovery of 191 pts to close 144 pts lower. Chinese futures were weaker yesterday and yesterdays movement in the May/July spread and slower export demand may have also foreshadowed today's decline. The current decline was expected as everyone knew it would eventually happen but no one was game to predict when. Today's price action is representative of a market that has had a large increase in a short period of time. Overall news remains light with demand being reduced at these levels and the potential for more profit taking. According to,chief executive,Allenberg Cotton Co.,a division of Louis Dreyfus Commodities projections COTTON WOULD HiT $1(100CENTS)a pound.

 

COTTON & TEXTILE NEWS

• Cotton Production Outlook May Rise as Prices Boost Planting : India Seeks to Boost Cotton Exports as Prices Gain. Cotton Falls From Two-Year High as Buyers Balk; Coffee Rises.  Cotton Falls for First Time in Seven Sessions as Dollar Climbs. Cotton Posts Biggest Monthly Gain in Two Years as Demand Jumps. Cotton Extends Gain to Two-Year High as Output May Trail Demand. March 2 (Bloomberg) -- Surging cotton prices may increase northern hemisphere crop planting, likely erasing a supply gap next season, according to a statistician at the International Cotton Advisory Committee. “It is very likely that production will grow from this point,” Armelle Gruere said in an interview in Canberra. The increase could narrow or erase a deficit currently forecast at 400,000 metric tons for the year starting Aug. 1, she said. Cotton prices in New York reached a two-year high yesterday as farmers in countries including the U.S. and China start to plant crops. The Washington-based committee yesterday forecast global output will rise 9.9 percent next season to 24.4 million tons, narrowing this year’s estimated 1.9 million ton deficit even as the group raised its estimate for consumption. “Everyone thinks the crop will get bigger and it might be that there is no gap,” said Gruere at the Australian Bureau of Agricultural and Resource Economics Outlook conference. “For now we can’t say more because we don’t have all the information. They are just starting to plant in the northern hemisphere.” Cotton for May delivery rose 1 percent to 83.29 cents a pound on ICE Futures U.S. in New York yesterday after touching 84.6 cents, the highest price for a most-active contract since March 6, 2008. Prices have jumped 25 percent since Feb. 5 and more than doubled in the past year as demand revived and adverse weather reduced output in the U.S. The Cotlook A Index of prices in Asian ports may average 74 cents a pound this season, 21 percent higher than the previous year and up from a February estimate of 72 cents, according to the committee’s report yesterday. The index, which reflects the average of the five cheapest prices offered at Far East ports, added 1.2 percent yesterday to 86.55 cents. Price Outlook : “Cotton prices will remain firm, but I don’t think they will be much higher than they are this season,” Gruere said. “My feeling is that the price may be above 70 cents but not a lot above 70 cents.” The committee, which represents producing and consuming countries, forecasts that China’s imports may increase to 2.2 million tons next season from 1.95 million tons as an increase in production fails to meet rising demand. Cotton planting in the country, the largest consumer, was conservatively estimated to increase 5 percent after difficult conditions in the past season, Gruere said. Production plunged 15 percent last year from 2008 to 6.4 million tons, the National Statistics Bureau said Feb. 25 in a statement on its Web site. U.S. Crop : Output in the U.S., the top exporter, may rise 29 percent to 16 million bales in the year starting Aug. 1, the U.S. Department of Agriculture said last month. Output of 12.4 million bales from the recent crop was the lowest since farmers collected 12.2 million bales in 1989, according to the USDA. Cotton prices will rise over the next three years, reaching 94 cents a pound in New York, according to Morgan Stanley. “We see inventories continuing to dwindle as cotton demand recovers on improved global GDP,” The 43 member countries in the ICAC account for 58 percent of world cotton production and 42 percent of fiber consumption. The organization estimates about 300 million people in the world are involved in producing and processing cotton.    Courtesy – Business Week 

  Firm trading amid strong spot rate : KARACHI: Trading activity remained steady amid strong physical prices and firm spot rate at the Karachi Cotton Association (KCA), dealers said Tuesday. The spot rate at KCA stood at Rs 5,600 per maund with strong physical prices above Rs 5,850 per maund during the trading session, they added. The spinners and mills have contracted deals for around 150,000 cotton bales from India to meet the production shortfall besides to keep running the wheels of the industry, KCA member Shakeel Ahmad said. “These import orders from Gujrat, India are now in the pipeline and cotton will start coming in within 15 days from now,” he added. Shakeel said the spinning sector as a major importer of the cotton contracted deals for blending purpose with the domestic cotton. He said the import consignments would be completed by the end of April 2010 as the country was facing a lean cotton season till May 2010. He said imported Indian cotton would cost around Rs 5,800 to Rs 5,900 per maund at shore to the importers excluding transportation and taxation charges at home. Courtesy – Daily Times

  China seems too be absent from the Mkt,although there are still plenty of RUMORS the recent deliveries in March may B heading 2 replenish China's reserve stocks,Import prices continued2rise,but@a smaller pace.Domestic prices were 39-40 Yn/ton higher in Inland for grades T229& T328.Equivalent Xinjiang grades were 32 & 30 higher.
  
   

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