Today is 3rd October 2021, we Already Entered In New crop year.
Last Cotton Crop Year Taught us a lot…….
What are the Take Away…..?
• Never underestimate Power of Demand.
• We started with over supply But Demand overtake the supply.
• 55% Price Rise in single crop Year can also possible.
• Follow the trend.
• Lot to Learn from CCI management.
Friends, Current year starts with Dry supply, Holding supply by Few Big Houses , CCI mostly sold out, and new crop , on which Buyers was Hopeful for new supply, Heavily Disturbed by September Rain mainly in North India who supplies us Early , from August every Year , Buyer’s Planning failed and They have to Run with whatever Available in Market, old , new , full of moisture lower grade.
The Nightmare started For Indian consumer and Forward seller , when last week ICE Cotton from 89 cents started fast Journey of 18 cents , followed by All global future Markets like ZCE , MCX, which Changed whole Scenario.
From different sources We get feedback of Indian Cotton opening stock , ( as on 1st October 2021) from 8 million to 5 million of 170 kg. But I am at 6.5 million Bales. Which is mostly in mills and with big Corporates or Exporter, With private ginners it’s less Available.
What is possible scenario of Coming Indian Cotton year.
With 65 lakh opening and Primary Crop estimate of 345 lakh Bales ( as Developing situation it may Change) and possibility of minimum 20 lakh Bales Import we have 430 lakh Bales in supply. Consumption minimum 350 lakh and export possibility is 50 lakh so we will have 30 lakh at the end of Coming year, ( Disclaimer : This all Above data can change , With Changing circumstances )
So what should be our Planning ?
• Open Import without Duty
• Mills should procure their Requirements in Time.
• This year Roll of CCI will be Limited and Buyer may not have long Carrying supply benefits as it was last year.
• Due to High Rates plan your Fund management, Because Requirement will be more.
• Buyers should remain Seller Friendly and procure their Requirements on little bit easy terms , Because Seller will choose the buyer who will easy on Available quality and Not Harass unnecessary.
• This year Ginners will Have good profit , Due to Good Demand and less Competition from Government Due to good Rate possibility. So should Run their Unit profitable way , without go behind unhealthy compitition whithin themselves.
*Global Clue*
What China really want to Do is unknown to us always, But it seems their Demand will be robust, Having many issues there, the way they procuring cotton from Brazil , USA and others ,shows their Eagerness to procure supply. And ZCE shows the same.
Brazilian cotton Mostly sold out, their crop is less than last year and Pakistan is importing country.
USA and African cotton only available Supply side Destinations.
But For Indian mills our cotton is viable comparing global Growth.
*Future Markets :*
ICE Cotton December closed at 104.53 with Good volume, High Open interest, and Limited certified stock. Mills On call sales is on top and Speculators are increasing their Buy position……in September ICE Cotton touched 107 + cents ingnoring all Nagative Reasons Globally like Freight issue, US Government Closer, Chinese power cut Issue , and many more.
Technically ICE have support at 101 and resistance at 106 , but expert see new high in coming days, let’s see……and keep your eye open.
Dollar/INR will also supportive to Bulls.
*Need of Time for India*
Having Leading Cotton Crop producer of world Indian Cotton price mechanism should not be Dependent on ICE Cotton, Like china we cotton people and GOI should take initiative to have strong Indian Hedging toolls and strong Indian Future Market support, Now a days Indian Cotton Rates mechanism Depends on ICE Cotton which is not in everyone’s Reach.
