Textile industry wants corporation to international rates

The domestic textile industry has demanded that the state-owned Cotton Corporation of India (CCI) should sell cotton at international rates. The demand has come at a time when the minimum support price (MSP) announced by the government in September this year is higher than the current market priceIn this regard, industry leaders are meeting in New Delhi on Wednesday to discuss the issue and put forth the demand to the government. The government raised the MSP for the current cotton year (2008-09) of medium long staple cotton to Rs 2,500 a quintal from Rs 1,900 a quintal, up 31.6 per cent where as prices of long staple cotton was scaled up to Rs 3,000 a quintal from Rs 2,030, up 47.78 per cent.
R K Dalmia, chairman, Confederation of Indian Textile Industry (CITI), said, “We will request the government that CCI should sell cotton to the industry at international rates (which currently are ruling below the MSP as well as the current spot price of cotton).” The industry anticipates that due to the rise in MSP, cotton prices would be firm.
J N Singh, joint secretary, Ministry of Textiles, had recently told Business Standard that cotton prices would be higher than the declared MSP.
During the last cotton year (October-September), the cotton prices in the country touched historical high of Rs 28,000 a candy (1 candy = 356 kg) and international prices ruled at as high as 81 cents per pound.
However, currently the domestic cotton prices (Shankar-6) have dipped to around Rs 22,500 a candy and international cotton is trading at around 55 cents per pound (approximately Rs 21,000 a candy). As per the latest estimates of Cotton Advisory Board, the country is expected to produce 32.2 million bales (1 bale = 170 kg) in the cotton year 2008-09 against last year’s produce of 31.5 million bales.

Cotton rates up by Rs 150 per maund

KARACHI: Cotton spot rates of Karachi Cotton Association (KCA) jumped by Rs 150 to Rs 3,875 per maund on rising buying activity from mills and exporters, brokers said.

Chairman, Cotton Broker Forum Naseem Usman said here that cotton had touched the peak at Rs 4000 per maund on Thursday on hectic buying from exporters, but declined on the rumours of a possible ban on cotton export.

Cotton was traded at Rs 3750 to Rs 3875 per maund in Punjab and Sindh during the week on rising demand.

Good quality phutti price touched the peak at Rs 2000 per 40 kg while binola price closed at Rs 900 per maund in Sindh.

Yarn prices up on high PSF, cotton rates: APTMA

LAHORE: The All Pakistan Textile Mills Association (APTMA), responding to concern of All Pakistan Cotton Power looms Association over rise in yarn prices, has attributed it to a 35 per cent increase in polyester staple fibre prices and high cotton rates.

In a statement APTMA, on behalf of its yarn manufacturing member, said the principal factor behind the rise in yarn prices was a steep increase in PSF prices in a short span.

APTMA said it had already written to the government that the price escalation had rendered the country’s produce uncompetitive compared to Chinese yarn, whose producers enjoyed a 25 per cent price advantage.

The association pointed out that the largest PSF producer of the country had shut down completely, resulting in acute shortage and soaring PSF prices.

“The market is experiencing a shortage of more than 11,000 tons of PSF every month. This shortage along with the protection provided by imposing anti-dumping duty on PSF imports has enabled local PSF manufacturers to raise prices periodically.”

Another factor, the association said, which weighed heavily on supply of yarn at competitive prices was unplanned gas loadshedding which disrupted supply to majority of the mills running on gas.

APTMA said increase in the price of cotton and other inputs had also contributed to the rise in yarn prices and pointed out that exports of cotton-polyester and polyester yarn was negligible ie less than 5 per cent of total production and was not a cause for their shortage and high prices in the domestic market.

coSOURCE : Market Committee Multan

COTTON RATES

Date	Seed Cotton		Cotton Seed		Cotton Seed Cake		Cotton Seed Oil		Lint
	Min.	Max.	Min.	Max.	Min.	Max.	Min.	Max.	Min.	Max.
01-11-08	1400	1400	750.40	750.40	665	665	2841	2841	3223	3223
02-11-08	Sunday Office Close
03-11-08	1450	1450	750.40	750.40	665	665	2841	2841	3377	3377
04-11-08
05-11-08
06-11-08
07-11-08	FRiday(Market Close)
08-11-08
09-11-08
10-11-08
11-11-08
12-11-08
13-11-08
14-11-08	Friday (Market Close)
15-11-08
16-11-08
17-11-08
18-11-08
19-11-08
20-11-08
21-11-08	Friday (Market Close)
22-11-08
23-11-08	Sunday Office Close
24-11-08
25-11-08
26-11-08
27-11-08
28-11-08	Friday (Market Close)
29-11-08
30-11-08	Sunday Office Close
31-11-08

Cotton spot rates up Rs250 to Rs,4159

KARACHI - Cotton spot rates of new crop jumped by Rs 250 to Rs 4,150 per maund (37.324 kg) on high demand during the week, brokers said.
Chairman Cotton Broker Forum Naseem Usman said here Saturday that KCA’s cotton rates went up from Rs 3,900 to Rs 4150 per maund due to buying of good quality cotton by the exporters.
He said that phutti prices also surged by Rs 100 to Rs 2100 per 40 kg and cotton seed by Rs 50 to Rs 890 per maund.
Naseem pointed out that exporters have dispatched 250,000 bales of cotton so far and contracted for another 50,000 bales from new crop.

MMF Prices

MMF Prices JUNE 2009
	Local Contracts (US$ per ton)
	Month	JUNE 2009	MAY 2009	JUNE 2008
	Polyester : PTA
	China (CFR)	1060-1200	860	*790-830
	USA (Delivered)	1349	996	1003
	Western Europe (Del) Preious	1455-1605	1130-1295	1160-1330
	Western Europe (Del) New Market	933-1030	*830-950	*830-950
	Polyester : MEG
	Far East (CFR)	1200	580-650	620-650
	USA (FOB)	1254	635-705	675-705
	Western Europe (Delivered)	1375	720	730
	€ Ton	880	530	*520
	Acrylics : Acrylonitrile
	Far East (CFR)	2040-2100	1180-1260	1180-1240
	USA (FOB)	2192-2280	1082-1171	1259-1348
	Western Europe (Delivered)	2880-3075	1640-1810	1745-1920
	€ Ton	1845-1970	1205-1330	1245-1370
	Acrylic : Fibre Prices
	Asia / Far East (C+F) Regional China c/kg	245-255	170-190	180-210
	USA (C+F) 3 denier tow imports c/lb	120-125	90-94	90-94

Exchange Rates 3rd October 2009
	Currency	Selling TT & OD	Buying TT Clean	Buying O/D T/Cheques	Selling C/Notes	Buying C/Notes
	U`SD	83.2600	83.0600	82.7184	83.5600	82.7600
	GBP	132.7175	132.4049	131.8604	133.1958	131.9268
	EUR	121.3296	121.0320	120.5342	121.7668	120.5949
	JPY	0.927004	0.925008	0.921204	0.9303	0.9217
	CHF	80.4300	80.1882	79.8584	-	-
	CAD	77.1073	76.9284	76.6120	-	-
	AED	22.6647	22.6165	22.5235	-	-

Bill Buying Rates Per Unit of Currency 3rd October 2009
	Currency	30 Days	60 Days	90 Days	120 Days	150 Days	180 Days
	USD L/C	82.1033	81.2335	80..3934	79.5193	78.6557	77.7921

China ZCE Cotton Rates 3rd October 2009
	Prod	Last	Cshg	Vol	Open Int.
	CF909	12870	90	100	1108
	CF911	13100	50	22	1268
	CF001	13245	55	11062	34248
	CF003	13450	75	60	1776

India Increases Minimum Price of Cotton to Match Market Rates

Sept. 5 (Bloomberg) -- India, the world's second-biggest cotton producer, raised the price it guarantees farmers by as much as 48 percent to match an increase in market rates.

The government will pay 3,000 rupees ($68) for every bale of long staple fiber, up from 2,030 rupees a year ago, said Subhash Grover, managing director of state-owned Cotton Corp. of India Ltd., the nation's biggest buyer of the commodity.

Prices of medium staple cotton were raised 39 percent to 2,500 rupees a bale, he said. A bale of cotton in India weighs 170 kilograms (375 pounds).

Cotton prices in India gained more than 40 percent in the past year as farmers and traders held back supplies and exports surged, according to Cotton Association of India Ltd.

Production in the year from Oct. 1 may reach 32.5 million bales, Grover said. That's 1 million bales more than an August forecast by Cotton Corp.

Farmers planted the crop on 8.9 million hectares (22 million acres) as of Aug. 29, 2 percent less than a year ago, according to the farm ministry.

To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net.

COTTON RATES ON DAILY BASIS
PREVAILING RATES OF COTTON COMMODITIES IN MARKET COMMITTEE, MULTAN
DURING 2007-2008 CROP SEASON Rs./40 Kgs

Date	Seed Cotton		Cotton Seed		Cotton Seed Cake		Cotton Seed Oil		Lint
	Min.	Max.	Min.	Max.	Min.	Max.	Min.	Max.	Min.	Max.
01-02-08	Friday (Market Closed)
02-02-08	1350	1375	643	664	536	546	3430	3537	3430	3564
03-02-08	Sunday (Office Closed)
04-02-08	1350	1375	643	664	536	546	3430	3537	3430	3564
05-02-08	Not available
06-02-08	Not available
07-02-08	Not Available
08-02-08	Friday (Market Closed)
09-02-08	Not Available
10-02-08	Sunday (Office Closed)
11-02-08	1350	1375	584	590	514	525	3376	3403	3484	3510
12-02-08	1300	1340	590	643	514	546	3591	3646	3323	3430
13-02-08	1300	1340	590	643	514	546	3591	3646	3323	3430
14-02-08	1330	1355	643	670	536	568	3646	3720	3376	3484
15-02-08	Friday (Market Closed)
16-02-08	1330	1355	643	670	536	568	3646	3760	3337	3484
17-02-08	Sunday (Office Closed)
18-02-08	Election Holiday
19-02-08	Not Available
20-02-08	1330	1515	643	670	536	568	3646	3760	3337	3484
21-02-08	1300	1350	643	670	536	568	3642	3832	3337	3484
22-02-08	Friday (Market Closed)
23-02-08	1300	1325	590	643	546	563	3752	3805	3377	3484
24-02-08	Sunday (Office Closed)
25-02-08	1325	1350	670	698	558	568	3752	3805	3484	3538
26-02-08	1350	1450	590	664	536	552	3752	3856	3377	3430
27-02-08
28-02-08

October 8th 2009

NY futures turned back up this week, with December rallying 231 points to close at 63.65 cents.

Strong outside markets continued to be a supporting factor for cotton this week. The US dollar index dropped to a 14-month low, while spot gold rallied to yet another all-time high of over 1'060 dollars an ounce today. The US dollar continues to get hammered as foreigners are trying to diversify away from the greenback.

US export sales of 136'300 running bales net (92'300 RB of Upland and 44'000 RB of Pima) continued to disappoint, but it was not for a lack of mill enquiries that sales remained relatively low. Due to the lateness of the US crop and the potential quality impact from cool and wet conditions, shippers are simply not able or willing to offer some of the grades that mills require and they have to turn many of their clients away or offer them alternative growths instead.

As of last week there were only 211'781 bales of new crop classed and just 44% of these bales were of tenderable qualities. With persistent cool and wet weather preventing harvest from gaining momentum, it is likely that the US will not be able to ship some of its October and November high grade commitments on time. Since mills don't carry a lot of inventories these days, they don't have the luxury to wait and see what happens with the US crop and they have therefore no choice but to look for replacements.

With mills turning their attention towards foreign growths, the A-index and hence the AWP should remain well supported for now and that may offset any harvest pressure that typically occurs at this point in the cycle. As we have previously mentioned, the world outside the US is looking at a 17.6 million bales production gap this season, which is usually filled with US exports. However, the US surplus is not only smaller than in pervious years, but due to the inclement weather there will probably be a shortage of certain premium qualities as well.

When we look at the current composition of the A-index, which calculated 64.55 cents before today's rise, we still have Pakistan (60.50 cents) and Tanzania (62.75 cents) as the two cheapest origins, followed by India (64.50 cents) and a pack of seven other growths all bunched together between 67.50 and 68.25 cents. Without these two relatively small exporters, Pakistan and Tanzania, the A-index would calculate 245 points higher. At some point these two will disappear from the index, because Tanzania is nearly sold out, while Pakistan has a production gap of its own and cannot afford to let too many of its high grades move abroad. We therefore do not expect to see any pressure on the A-index in the foreseeable future and we may even see quotes rise, because India, Uzbekistan and the various African origins are getting a lot of demand at the moment.

If the A-index were to go up, it would force US prices higher as well, at least for the next 4 or 5 cents. Once the AWP (47.34 cents next week) rises above the loan of 52.00 cents, US cotton can be redeemed either at the loan plus carryings or at the AWP, whichever is cheaper. Therefore, if foreign prices move substantially higher, let's say five to ten cents from current levels, then the feedback loop that currently exist between foreign and US prices would stop. Once the AWP is significantly higher than the 52.00 cents loan, it is no longer relevant to US pricing, especially this early in the season when loan cotton has not yet accumulated a lot of storage and interest. This would also make it difficult for the futures market to run away to the upside, because it would no longer have to keep pace with a rising AWP, but instead it would have the 52.00 cents loan level as its reference point. Therefore, once the futures market approaches 70 cents, it offers an attractive spread for loan redemptions.

Of course the above described scenario only works if there are no more setbacks to the US crop. If West Texas gets into serious trouble all bets are off, as it would force trade shorts to scramble out of positions, which could lead to an explosive move to the upside. However, at this point it does not look like a frost is going to occur in West Texas next week, which means that the crop still has a chance to finish. We will have to keep our fingers crossed for the next three or four weeks!

So where do we go from here? Strong outside markets and the weather remain the main drivers at the moment. The weather remains a major worry as two cold fronts are dipping down towards the cotton belt, although at this point no season-ending frost is forecast. The Mid-South crop is a disaster this year, but fortunately it "only" encompasses 3.2 million bales, while the remaining 10 million bales may still produce a decent crop. However, there is no more room for error since the crops are late and time is running out. The market will therefore be on edge for the next 3 or 4 weeks and any turn for the worse could send values skyrocketing. Furthermore some powerful speculators have cotton on their radar screen and they will not hesitate to commit to long positions if the chart gives them a reason to. Depending on what indicators these chart traders are following, the trigger points are somewhere between 64.04 and 65.47 cents. The market is well supported and there is probably a better than 50/50 chance that the market will take out the triple top and rally towards 70 cents in the near future. It may therefore not be a bad idea for anybody with short futures to exchange them for some in the money puts or put spreads!

Latest Prices as of Monday, Sep 28, 2009

Cotton #2 Latest Prices as of Monday, Sep 28, 2009 11:17 AM CT
Contract	Last	Change	Open	High	Low	Prev. Close	Date/Time
Oct 09	61.63	+1.03	60.60	61.63	60.60	60.60	9-28 11:15 AM
Dec 09	62.92	+0.98	62.10	62.93	61.60	61.94	9-28 11:15 AM
Mar 10	65.07	+1.13	64.31	65.07	63.60	61.01	9-28 11:15 AM
May 10	0.00	unch	0.00	0.00	0.00	55.71	9-28 11:15 AM
Jul 10	67.10	+0.86	66.34	67.10	66.34	51.73	9-28 11:15 AM
Oct 10	67.62	-2.13	0.00	0.00	0.00	64.78	9-28 11:15 AM
Dec 10	68.35	+0.13	68.28	68.65	68.28	64.34	9-28 11:15 AM
Mar 11	0.00	unch	0.00	0.00	0.00	54.01	9-28 11:15 AM