MCX cotton futures for July delivery looks positive and likely to continue with the trend in the near term. Traders are advised to buy on dips. For intra-day, support for the commodity is seen at 19100 while resistance is at 19900 level. Traders may buy around 19450 with the stop loss of 19100 for the target of 19900. MCX cotton for July delivery was seen trading down by 0.31% at Rs.19580 per bales as of 11.43 AM IST on Tuesday.
Sell on rise is advised to the traders. Support for the commodity is seen at 1040 while resistanc..
Support for the commodity is seen at 1060 while 1095 is the resistance. Traders may buy around 10..
“Support for the commodity is seen at 1003 level while 1055 is the resistance,” said ..
Kapas is unginned cotton or the white fibrous substance covering the seed that is obtained from the cotton plant.
The biggest cultivators of cotton are America, India, China, Egypt, Pakistan, Sudan and Eastern Europe, with China, US and India being the three largest producers of cotton. Among the consumers China leads the way being followed by India, Pakistan, US and Turkey. India is set to become number one producer and consumer of cotton.
India is the third largest producer of cotton in the world with production of around 3.95 million MT. Area under cotton is around 9.50 million hectares contributing about 21% in world share and keeps fluctuating owing to monsoon and other factors Despite having the largest area under cotton in the world, India ranks third in world output of cotton due to its abysmally low average yield of 415 kgs against a world average of 723 kgs per hectare.
Cotton is cultivated in almost all the states in the country, the 9 states of Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Andhra Pradesh, Tamil Nadu and Karnataka account for more than 95 percent of the area under output. In India cotton is sown during March to September and harvested during September to April. The peak marketing season for the crop is during November to March. At present about 40 percent of the 5 million hectares of total area under cotton in India is under hybrid cotton.
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Over the years, country has achieved significant quantitative increase in cotton production. Till 1970s, country used to import massive quantities of cotton in the range of 8.00 to 9.00 lakh bales per annum. However, after Government launched special schemes like intensive cotton production programmes through successive five-year plans, that cotton production received the necessary impetus through increase in area and sowing of Hybrid varieties around mid 70s. Since then country has become self-sufficient in cotton production barring few years in the late 90s and early 20s when large quantities of cotton had to be imported due to lower crop production and increasing cotton requirements of the domestic textile industry.
Since launch of "Technology Mission on Cotton" by Government of India in February 2000 significant achievements have been made in increasing yield and production through development of high yielding varieties, appropriate transfer of technology, better farm management practices, increased area under cultivation of Bt cotton hybrids etc. All these developments have resulted into a turn around in cotton production in the country since last 2/3 years. The yield per hectare which has remained stagnant at about 300 kg/ha for more than 10 years, increased substantially and reached a level of 560 kg/ha in cotton season 2007-08.
The fundamental changes that taking place in the realm of cotton cultivation in the country, are having the potential to take the current productivity level near to the world average cotton production per hectare in the near future. Apart from meeting the increased cotton consumption by domestic textile industry, country may have sufficient surplus cotton to meet the cotton requirements of importing countries.
The domestic textile industry is one of the largest industry in the country and has witnessed a phenomenal growth in the last two decades in terms of installed spindlage and yarn production. The significant features of this growth include installation of open-end rotors and setting up of export-oriented units. Technology-wise, Indian spinning industry has been able to keep pace with the international technology trends to a fair degree and this pace of modernisation received a fillip after launching of "Technology Upgradation Fund" by the Government of India in April 1999.
The mushroom growth of spinning industry and its modernization has led to sustained growth in cotton consumption specially during the years when country harvested good crop production. After achieving a sustained growth in cotton consumption during Xth Plan period, domestic cotton consumption increased by about 7% in the year 2005-06, by around 9% during 2006-07 and by around 6% in 2007-08.
What is Cotlook?
India is the third largest producer of cotton in the world after China and USA accounting for about 14% of the world cotton production. It has the distinction of having the largest area under cotton cultivation in the world ranging between 8.00 million to 9.00 million hectares and constituting about 26% of the world area under cotton cultivation. The yield per hectare is however, the lowest against the world average, but over the last two years have shown a promising potential to reach near the world average production level in near future.
Main cotton producing states in India are Gujarat, Maharashtra, Punjab, MP, Haryana, Karnataka, Rajasthan and Tamil Nadu. It is a mainly a rain-fed crop. Its sowing starts in April and continues till June. The main arrival starts from September to December. However, arrival continues till March but in small quantity. From the crop, four products are obtained - cotton, cotton seed cake, cotton cake oil and cotton cake. Around 33% cotton and 66% cotton seed cake is obtained. Some farmers feed the cake to their cattle due to high protein contents in it. Production of cotton in India is increasing year by year. It is to be noted that last year, India exported a record quantity of cotton.
Gujarat is the largest cotton producing state in India. Nearly 112 lakh bales were produced in 2007-08 with cultivation area of around 26.16 hectare area. During 2008-09, production is expected to reduce to around 110 lakh bale with the cultivation area of nearly 24.17 lakh hectare. Production in Southern Gujarat is less compared to the entire state.
Maharashtra is the second largest cotton producer state. During 2007-08, around 62 lakh bales were produced here. Around 31.91 lakh hectare field was cultivated that year. During 2008-09, cotton sowing is likely to take place in 31.33 lakh hectare.
AP is the third largest cotton producer state in India. Cotton production is increasing here year by year. In 2007-08, around 46 lakh bales was produced and this is expected to increase in 2008-09 to 58 lakh bales. Sowing area of cotton is expected to increase to 13.19 lakh hectare in 2008-09 from 10.96 lakh hectare in 2007-08.
At present, most farmers are cultivating BT cotton instead of domestic variety of cotton. During 2007-08, around 22 lakh bales were produced. This is expected to fall in 2008-09 to 20 lakh bales due to costly seed and unavailability of pure seeds. It has reduced the focus of farmers from its cultivation. Moreover, sowing area of cotton is expected to fall to 5.60 lakh hectare in 2008-09 which was 6.41 lakh hectare in 2007-08. Main cotton producer areas are Abohar, Bhathinda, Fajjilak, Bhudlada, Kotakpura, Mansa, Moga, Muktsar, Rampura-Phool etc.
Malwa is the main producing belt in MP. During 2007-08, ~21 lakh bales was produced here in 6.62 lakh hectare area. This is expected to decrease to 20 lakh bales during 2008-09. Sowing area during this period is expected to reduce to 6.43 lakh hectares, as farmers preferred to cultivate soybean due to good returns.
In Haryana, with the reluctance of farmers for this crop, production is expected to fall to 15 lakh bales in 2008-09. The sowing area is also expected to fall to 4.16 lakh hectares. The production was nearly 16 lakh bales during 2007-08 with a sowing area of 4.83 lakh hectare.
The main cotton producing areas of Karnataka are Dharwar, Chitradurga, Gadag, Bijapur and Belgaon. In 2007-08, around 8 lakh bales was produced here. Sowing at that year was recorded in nearly 3.88 lakh hectare. However, cotton production is expected to increase by 2 lakh bale to 10 lakh bale during 2008-09 as productivity has reportedly increased here in spite of low sowing acreage. Sowing area during the 2008-09 is likely to remain nearly 3.35 lakh hectare.
Mainly 2 districts - Shri Ganga Nagar and Hanumangarh produce cotton. However, some production also taken some place in Bikaner and Ajmer. During 2007-08, around 9 lakh bales were produced. This is expected to decrease in 2008-09 to 8 lakh bales. Sowing area of cotton is expected to fall to 2.17 lakh hectare in 2008-09 while during 2007-08, around 3.68 lakh hectares area was cultivated.
During 2007-08, around 5 lakh bales was produced here while sowing was done in 1.30 lakh hectare. In 2008-09, nearly the same production is expected to produce with reduction in sowing area by 10000 hectares. Main producing areas of cotton in Tamil Nadu are Ramanathpuram, Virudha Nagar, Dindigul etc.
Total expected production this year is 330 lakh bales. With a carry over stock of 43 lakh bales, the total availability in the Indian markets will be 373 lakh bales.
Total Indian consumption is expected to be 215 lakh bales this year. During 2007-08, India exported around 85 lakh bales while this year export figure has fallen drastically and mere 75000 bales have been exported so far. The exports have fallen mainly due to the lower rates prevailing in the International markets. Again, recessionary trend in International markets is keeping export demand from countries like China weak.
As per sources, if exports remain low, market could see further fall in the cotton prices when the purchase by Cotton Corporation of India stops. China, Bangladesh and Pakistan are the main importer countries of cotton.