Commodities

Cotton - Key Highlights - Geojit



Posted On : 2020-06-01 22:52:30( TIMEZONE : IST )

Cotton - Key Highlights - Geojit

- UK-based Cotton Outlook has cut its global cotton consumption estimate to 22.2 mln tn for 2019-20 (Aug-Jul), from 22.5 mln tn projected last month. Consumption has considerably declined in major markets lead to a rise in ending stocks on in its May report. Global ending stock of cotton in the current season is pegged at 3.6 mln tn compared with 3.56 mln tn projected in the previous month. The agency cut its projection for global production to 25.8 mln tn in 2019-20, due to a likely fall of output in India.The country's 2019-20 cotton production is seen at 6.04 mln tn, compared with 6.29 mln tn projected in the previous month.

- The Cotton Association of India has revised downward its crop estimate for India in the 2019-20 (Oct-Sep) season to 33.0 mln bales (1 bale = 170 kg), from 35.45 mln bales projected in the previous month.The association has also lowered its estimate for domestic consumption to 28.0 mln bales for the current year, compared with 33.1 mln bales a month ago.The estimate for imports has also been lowered to 1.5 mln bales, from 2.5 mln bales. Considering the opening stock of 3.2 mln bales, the cotton body expects the total supply in the current season to be around 37.7 mln bales. It has revised upward its export estimate at 4.7 mln bales, from 4.2 mln bales a month ago. The closing stock of cotton for the 2019-20 season is now pegged at 5.0 mln bales.

- US Department of Agriculture expects global production of cotton to fall by 3% to 118.95 mln bales (1 US bale = 218 kg) in the season starting August. The agency has pegged 2020-21 world consumption at 116.5 mln bales, up from 105.0 mln bales expected in pandemic-hit 2019-20. Global exports for the coming season is pegged at 42.9 mln bales, up from 40.1 mln bales estimated for 2019-20.Global ending stocks in 2020-21 was pegged at 99.4 mln bales, up for the second consecutive year. Output in the US is likely to fall to 19.5 mln bales in 2020-21, com-pared with the estimate of 19.9 mln bales in 2019-20.

- The US Department of Agriculture's Foreign Agricultural Service has projected India's 2020-21 (Aug-Jul)cotton crop to fall 3% to 36.5 mln bales (1 bale = 170 kg).The expectation of lower production stems from likely fall in acreage to 12.64 mln ha from 13.3 mln in the ongoing year. Yields may though improve by 2% if rains remain normal as projected, it said in a report.India's 2020-21 cotton consumption is seen at 29.5 mln bales, higher from 28.9 mln bales in the current year. "The marginal increase is expected as textile industry operations restart and begin the process of recovery after the impact of the lockdown in marketing year 2019-20.Exports are forecast to rise to 4.5 mln bales in the coming season, while imports are expected to decline to 1.3 mln bales due to weakening.Opening stock of cotton in India is estimated at 19.6 mln bales in 2020-21. The closing stock is estimated at 23.5 mln bales, higher from 19.6 mln bales projected for the current year.

- Research experts have advised cotton farmers to start sowing for the upcoming 2020-21 (Jul-Jun) season only by mid-June to prevent pink bollworm infestation.

- Cotton output in Telangana is seen rising 65% on year to 6.9 mln bales in 2019-20 due to a sharp rise in yields. Yield may rise to 548 kg per ha from 384 kg the previous year.

- The International Cotton Advisory Committee has revised downward its 2019-20 (Aug-Jul) forecast for global prices due to a sharp fall in con-sumption as containment measures for COVID-19 have shut business activity, in its May report. With the opening stock of 18.6 mln tn for 2019-20 season, global supply of cotton is projected at 44.9 mln tn. The committee has scaled down its global cotton consumption to 22.9 mln tn, from 24.6 mln tn projected in the previous month.Global export is projected to fall 11% to 8.3 mln tn, compared with 9.3 mln tn estimated a month ago. Ending stock for the current season is seen at 21.9 mln tn, higher than 19.7 mln tn projected a month ago.For India, the committee sees consumption declining 4.75 mln tn in 2019-20 season, from 5.13 mln tn estimated in the previous month. Cotton output in India is estimat-ed at 6.2 mln tn, higher from 6.0 mln tn estimated in April.

- According to Cotton Advisory Board, India's cotton output in the 2019-20 season is projected at 36.0 mln bales (1 bale = 170 kg), com-pared with 33.0 mln bales a year ago.

Source : Equity Bulls

Keywords