Domestic cotton prices were down at the local bourse and spot markets on Monday even though prices shot up considerably last week by tracking firmer cues from international markets, and therefore correction was seen at a higher level, Ganatara told IANS on phone from Mumbai.
However, there is the least possibility of any further big price fall as the CAI has revised its estimates for cotton demand and supply in the country on the lower side after getting crop reports from all its centres, the CAI chief added.
The CAI pegged India’s cotton output in 2017-18 at 362 lakh bales, five lakh bales down from the previous monthly estimates of 367 lakh bales in its Crop Committee meeting on March 9.
As per the minutes of the meeting released on Monday, cotton production is down by two lakh bales each in Karnataka and Andhra Pradesh, and an estimated one lakh bales elsewhere.
According to a CAI statement, exports have increased from the earlier estimated 55 lakh bales to 60 lakh bales because India’s cotton is presently the cheapest in the world and hence commands a good demand.
By March 31, Indian cotton exports may cross 45 lakh bales.
Besides, Indian mills consumption has increased by 10 lakh bales from 320 lakh bales to 330 lakh bales in the new estimated balance sheet given out by the CAI.
This increase in consumption is because of 35-40 lakh new spindles set up in ginning mills in Gujarat, where cotton consumption is likely to be 65 lakh bales this year.
The carry forward in the balance sheet for 2017-18 is going to be reduced to 22 lakh bales from the earlier estimated 42 lakh bales as of September 30, the CAI said.
According to the CAI, the reduction of 20 lakh bales in carry-forward stocks is due to an increase in consumption by 10 lakh bales by Indian mills and rise in exports by 5 lakh bales.
Also, output has been lowered by five lakh bales from last month’s forecast.
This reduction is based on talks with cotton associations of these states, mainly due to pink bollworms problem and lack of water in these areas, the CAI said.
By 3.25 p.m. on Monday, cotton for delivery in March was Rs 210 or 1 per cent down at Rs 20,730 per bale (170 kg) at the Multi Commodity Exchange (MCX). Similarly, the April expiry contract was up Rs 200 or 0.94 per cent at Rs 20,990 per bale.
Spot prices also declined across the country, tracking weak cues from futures.
Meanwhile, China has started selling cotton from its reserve stocks in the state-owned warehouses. Website cnctton.com reported on Monday that China State Reserve sold 14,119.18 tonnes of cotton out of 15,000.26 tonnes put up for the first auction on Monday in the current season.
According to Ganatara, China had liquidated 1.5 crore bales of cotton last year with the same target for the ongoing season. Since stocks of cotton in China are not sufficient to fulfill their mills’ demand, their import demand is expected to rise by the end of the season.
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