COTTON &  TEXTILES NEWS :

Gujarat's cotton rots, thanks to ban on exports: April 27, 2012 - Despite a bumper production this year, cotton farmers of Gujarat have been left in the lurch. Around 12 million bales of cotton are lying unused in the state, their quality deteriorating by the day in the hot sun. Currently, millions of bales are lying outside the marketing yards at Jasdan, Gondal, Padadhari, Prantij, Bodeli, Botad and other places. The cotton has no buyers, thanks to the Centre not allowing export of cotton. And the Central government's nodal agency - Cotton Corporation of India (CCI) - has also been unable to purchase the entire stock, which could have been used as buffer stock. "It is a time of unprecedented crisis for the state's cotton farmers," said agriculture minister Dilip Sanghani. "The Central government is forcing them to sell cotton at a cheaper rate by not allowing export." The CCI stopped purchasing five days ago, creating a huge glut in the market, he said. The Centre had announced that the CCI would purchase cotton to create a buffer stock of 25 lakh bales. "The cost was to be R4,500 per quintal. But no purchase is happening," he said. In 2011-12, nearly 3 million hectares were under cotton cultivation in Gujarat. The estimated production was close to 120 lakh bales - one-third of the country's total of 368 lakh bales. The previous year, cotton production in the state stood at 98 lakh bales from a 26-lakh-hectare area. "Gujarat's own consumption is hardly 15 lakh bales, since there are only 6 lakh looms in the state," said a senior official of the state agriculture department. Tamil Nadu, in comparison, has 150 lakh looms. "Under the circumstances, our farmers have to rely only on direct export or purchase by the CCI," he said. If the CCI does not buy the stock, the quality of the cotton will deteriorate, which, in turn, will affect prices.  "We want the CCI to buy the cotton at the support price announced by the Central government, otherwise the farmers will launch a statewide agitation against the Centre," said Bharatiya Janata Party legislator Bharat Boghra. Courtesy -- Hindustan Times

Cotton body tells Govt to drop plans on creating reserves: MUMBAI, APRIL 26: The Cotton Association of India (CAI) has urged the Government not to go ahead with its plan to create strategic cotton reserve for domestic supply. The Cotton Corporation of India (CCI) has been given a mandate to procure 25 lakh bales (of 170 kg) for building the reserve. Mr Dhiren N. Sheth, President of CAI, said it is disturbing to note that our country is moving back to the pre-liberalised era of late 1980s and early 1990s. The idea of creating a strategic reserve for ensuring supply of cotton to domestic textile mills was mooted on the lines of a similar reserve in China. But the situation in India and China is not comparable, he said. Supply of cotton in China is much less than the demand, while in India cotton economy is more vibrant and the supply exceeds demand. India is also ranked among top exporters. A total investment of about Rs 5,000 crore is required for procuring 25 lakh bales, said Mr Sheth. Another Rs 500 crore is required every year for servicing interest and warehousing cost, said Mr Sheth. In addition, CCI will have to bear the loss that may arise due to fluctuation in prices. "If the problem is non-availability of funds with the textile mills to buy and stock cotton, it would be appropriate to address the same through banking channels, rather than creating a scheme which distorts the market and unsettles other sectors in the cotton value chain," said Mr Sheth. Courtesy -  The Hindu Business Line

International cotton yarn market weekly(Apr 23-27, 2012) - Apr 27 2012:

Values of coton yarn have shown little movement. China's cotton yarn imports remained strong in March. Indian cotton yarn exports rose by 15 percent in the last fiscal year. 
In Pakistan: demand for yarn from foreign sources has been average. Regular business has lacked volume. Asking prices for 20/21s carded yarn have been stable at around US$540.00/570.00 per 400lb bale, while prices for 30/32s carded yarn have been maintained at around US$600.00/625.00. Polyester staple fibre prices have been quoted at around Rs. 167/170 per kilo. 
In Turkey: dull trading conditions persist on the local raw cotton market. The principal focus of spinners remains cotton from the domestic 2011/12 crop, but even demand for such supplies is this week described as rather poor. 
In India: market observers comment that cotton yarn exports continued to do reasonably well, assisted by the recently weaker tendency of the rupee against the US dollar. Current export asking rates (FOB Indian ports, including 2 commission) were put at around US$3.00 per kilo for carded weaving 20s, and $3.25 for 30s. 
In China: yarn stocks rose by five percent (those of cotton blends were up 12 percent). Growth in yarn output was 6.6%. Courtesy -- CCF Group

China cotton stocks rise on hopes of higher import quotas: BEIJING, April 26  - Cotton stored at Chinese bonded warehouses has risen to as much as a million tonnes after merchants stocked up with cheaper overseas supplies in anticipation of Beijing raising import quotas, trade sources and analysts said on Thursday. China, the world's top cotton buyer, may issue a new batch of quotas for as much as 1.5 million tonnes by May to help textile mills secure cheaper cotton overseas, since Indian supplies are currently about 15 percent cheaper than domestic cotton, they said. Expectations of higher imports have helped push down China's cotton futures on the Zhengzhou Commodity Exchange, with the most-active September contract down over one percent so far this week and on track for its worst weekly loss in five weeks. "There is a large volume of cotton stockpiled at bonded warehouses and textile mills have been pushing the government to issue more import quotas," said Dong Shuzhi, director of the cotton department at Founder Commodities Group, a Chinese trading house. "There are now growing expectations from the market that Beijing will agree to issue more quotas." Despite lacklustre demand at home, China's cotton prices are now the most expensive in the world at over 20,000 yuan ($3,200) a tonne, thanks to Beijing's deliberate stockpiling campaign aimed at shoring up prices. The buying blitz, which began in September and lasted for six months, saw the government sweeping up 3.13 million tonnes of cotton - nearly half of the country's 2011 harvest. Cotton stocks at bonded warehouses - which allow goods that have arrived in China to delay the assessment of a 17 percent value-added tax - are hovering at between 500,000 and one million tonnes, according to industry estimates. "They took care of the farmers from September to March with the stockpiling. Now the mills are saying 'take care of us'," said a cotton trader based in the United States, adding that the stocks sitting in Chinese warehouses would likely be included in the import quota increase. Some textile mills betting on higher import quotas have also signed additional contracts, mainly for high-quality cotton from the United States and Australia, said the China Cotton Information Center in a report. "Overseas cotton prices are much cheaper and have a big advantage over domestic prices, so mills are eager to get more cheap cotton, which is in short supply here in the market," said Zhang Wenmin, head of the cotton department with Wanda Futures. Although the new batch of import quotas may exceed a million tonnes, China's import appetite may come in lower, since Beijing is likely to release stocks from its pent-up reserves to make space for this year's harvest due in September, said Zhang. Zhang expects Beijing to release the 300,000 tonnes of old stocks, which were carried over from the 2009 harvest purchased at a price of about 17,000 yuan ($2,700) per tonne and should be attractive to textile mills. "Beijing's action will depend on how local demand and prices hold up after May 1," said a trader with a large international trading house. "If textile mills are receiving more orders, the government will need to either issue more quotas or even release its reserves." ($1 = 6.3041 yuan) Courtesy -- Reuters

Cameroon cotton output up 11 pct in 2011-12: YAOUNDE, April 26 - Cameroon's raw cotton production rose 11 percent to 180,000 tonnes during the 2011-12 season and could reach 220,000 tonnes this year, according to state firm SODECOTTON, which attributed the boost to increased cotton acreage and government subsidies. Cameroon increased state-regulated farmgate prices for cotton by 27 percent last season to 250 CFA francs ($0.50) per kilogram to encourage more farming and to combat rampant smuggling to neighboring countries. "The surface area cultivated rose from (...) 143,000 hectares in the previous year (to) 149,000 hectares, and we expect it to further rise to over 150,000 in 2012/13," SODECOTTON general manager Iya Mohamed told reporters. "We think another important factor that has raised production was the government decision to subsidize the purchase of farming inputs to the tune of 6 billion CFA francs ($12 million)," he said. The central African country produced 161,900 tonnes of cotton during the 2010-11 season. Mohamed said output could hit 220,000 tonnes this season and rise to 250,000 tonnes by 2015. The cotton season in Cameroon runs from November to April. Production hit a record of 306,263 tonnes in 2004/05 before falling sharply to 110,000 tonnes in 2009/2010 because of a drop in prices on the world market. ($1 = 495.8290 CFA francs) Courtesy -- Reuters

Zimbabwe: Lint Price Crash Leaves Cotton Ginners Stranded: 26 APRIL 2012 - THE current global lint price crash has created challenges for cotton ginners in disposing their lint at profitable prices. Cotton Ginners' Association of Zimbabwe director-general Mr Godfrey Buka yesterday said lint was being sold at prices below the cost of production. He said this was causing huge losses to farmers. "The record peak period was at a time when the Zimbabwean cotton was still in the fields and therefore not ready for marketing. This period of high lint prices was, however, shortlived as prices took a downward spiral from the end of March 2011 to the present," he said. He said that high demand for lint and speculative tendencies initially pushed prices up resulting in very high prices being quoted on the Cotlook A Index, causing serious price volatility. "The peak price went up to US$2,45 per kg. This situation existed during Zimbabwe's growing season up to the time just before the marketing of seed cotton. "High demand from the Chinese market pushed the prices up but eased gradually resulting in prices declining," Mr Buka said. The lint price decline, he said, started when Zimbabwean growers began delivering their crop for sale after the domestic price negotiations had already been concluded. At the start of the domestic cotton marketing season, ginners and growers negotiated and agreed on a pricing formula based on the International Cotton Advisory Committee's average lint price of US$1,62 per pound projected to June 2011 as a basis for the minimum prices. But the market crashed to levels just above US$1 per kg at the start of the marketing season. Courtesy --