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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed

07 November 2012

USDA GAIN: India Cotton and Products Update - October 2012USDA GAIN: India Cotton and Products Update - October 2012

India’s 2012/13 cotton harvest is underway with reported arrivals of 850,000 170 kg bales through the end of October. The onset of harvest is a few weeks later than normal given the planting delays in some areas because of the late onset of the monsoon.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

The 2012/13 Cotton Harvest Begins

The Ministry of Agriculture (see Table 1) indicates that cotton planted area has reached 11.6 million hectares. With the possibility of some additional planting in the south, area could inch slightly higher. India’s 2012/13 cotton production forecast is unchanged at 33.0 million 170kg bales (25.5 million 480 lb bales). With the anticipated delay in the onset of harvest, as of October 28, 2012, arrivals had reached 850,000 170 kg bales, compared to 1.2 million bales a year ago when the onset of harvest was also considered somewhat later than normal. Prices for seed cotton were hovering at or below the minimum support price of Rs. 3,850 per quintal (35 cents per pound) for the representative Shankar-6 through the end of September and early October, but have jumped to Rs. 4,500 (41 cents per pound) over the past few weeks as mills have begun buying and the Cotton Corporation of India (CCI) stands ready to procure in an effort to support prices. CCI has made small commercial purchases in Punjab and Andhra Pradesh. [For Table 1, please download the document]

Cotton Consumption Strong of Late

Monthly cotton consumption was 2.1 million 170 kg bales in August, the ninth consecutive month that consumption exceeded 2.0 million bales (see Table 2). Spinning margins climbed to over a dollar per kg for the representative 40s count yarn in late September and early October pointing to continued strong consumption. Margins have dropped to 80 cents of late as yarn prices have declined, but are still in a range that is considered profitable for mills (see Table 6). FAS Mumbai continues to estimate 2011/12 cotton consumption at 21.0 million 480 lb bales and continues to recommend that USDA Washington adopt final cotton consumption estimates for 2010/11 and 2011/12. [For Table 2, please download the document]

Trade Estimates Largely Unchanged

Preliminary final data suggest that 2011/12 cotton exports were 13.9 million 170 kg bales (11.0 million 480 lb bales), 500,000 480 lb bales higher than the current USDA Washington estimate (see Tables 3a and 3b). Exports from August through October were just 200,000 480 lb bales and Indian export prices are trading at premiums to ICE nearby futures and the Cotlook A Index when domestic transportation costs are considered (see Table 5). As cotton becomes available, the pace of exports is expected to increase. Exporters have at least temporary certainty concerning the 2012/13 cotton export policy (see IN2136 for more details), but India’s minimum support price could present a challenge for exporters if international prices remain weak. [For tables, please download the document]

Preliminary final data suggest that 2011/12 imports were 500,000 170 kg bales (400,000 480 lb bales), 200,000 480 bales below the current USDA Washington estimate. Initial estimates indicate that imports were over 400,000 480 lb bales from August through October, lending support to the current USDA Washington estimate (see Tables 4a and 4b).

Recommended trade estimates for 2010/11 reflect official data.

November 2012

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