Report highlights Farm to market yard arrivals remain steady while mill buying remains very weak. FAS Mumbai revised the Post MY2014/15 export estimate to 5 million 480 lb. bales to reflect a slowdown in Chinese buying but steady demand from other countries. Procurement under minimum support price (MSP) operations has reached 4.8 million 480 lb. bales. The Cotton Corporation of India (CCI) has commenced with small quantity sales of some of the MSP procured cotton.

Cotton India

2012/2013

2013/2014

2014/2015

Market Year Begin:

Aug 2012

Aug 2013

Aug 2014

USDA Official

New Post

USDA Official

New

Post

USDA Official

New

Post

Area Planted

0

0

0

0

0

0

Area Harvested

12,000

12,000

11,700

11,700

12,700

12,700

Beginning Stocks

10,869

10,819

11,945

10,978

11,515

10,054

Production

28,500

28,500

31,000

31,000

30,500

30,400

Imports

1,187

1,187

675

675

1,100

1,000

MY Imports from U.S.

0

0

0

0

0

0

Total Supply

40,556

40,506

43,620

42,653

43,115

41,451

Exports

7,761

7,761

9,255

9,261

4,700

5,000

Use

21,850

21,767

23,350

23,338

24,000

24,000

Loss

-1,000

0

-500

0

0

0

Total Dom. Cons.

20,850

21,767

22,850

23,341

24,000

24,000

Ending Stocks

11,945

10,978

11,515

10,054

14,415

12,454

Total Distribution

40,556

40,506

43,620

42,653

43,115

41,451

1000 HA, 1000 480 lb. Bales, PERCENT, KG/HA

Arrivals

On January 28, 2015, marketing year (MY) 2014/15 all India cotton arrivals, as reported by the CCI, reached 16.3 million 480 lb. bales (20.9 million 170 kg bales/3.5 mmt). Nationwide, almost 52 percent of the estimated crop has arrived in the market. Farmers are making distressed sales across the country as prices remain lower than MSP. In Maharashtra, because of this, arrivals have picked up pace. Recent Post interactions with the farmers in Maharashtra indicate concerns over the farm gate prices in the near term as new-crop planting season gets nearer.

CCI Procurement crosses 6 million 170 kg bales mark

Overall procurement of cotton by CCI under MSP operations has reached 4.8 million 480 lb. bales (6.1 million 170 kg bales/ 1 mmt). The procurement by the Maharashtra state marketing federation on behalf of CCI was erroneously reported as 75,000 mt of cotton lint. The reported quantity was 75,000 mt of seed cotton equating to almost 25,000 mt of cotton lint. In Maharashtra, total procurement by CCI and the state marketing federation has reached around 1.1 million 480 lb. bales /1.5 million 170 kg bales.

CCI commences stock sales

CCI has started releasing smaller quantities of cotton stocks via e-auction. As on February 3, 2015, CCI has offered between 25,000-30,000 170 kg bales for auction. Trade reports indicate that the actual volumes sold are minimal.

Consumption

The average per month mill consumption rate in MY 2014/15 is 1.9 million 480 lb. bales. The Post forecast anticipates use below these average levels in the remaining year due to large domestic stocks and falling prices. In general, however, as global demand remains sluggish and Indian ex-gin prices are on par with the Cotlook A Index there may be limited buying.

Trade

FAS Mumbai's export forecast is 5 million 480 lb. bales to reflect anticipated Indian global exports over the remainder of the marketing year. This takes into account slower demand in China which were down from last month by more than 50 percent. Additionally, this considers exports to other countries which should remain steady.

Demand for imported cotton has tempered as Indian arrivals have picked up. Imports from Pakistan constituted almost 40 percent of total shipments received in January