Monthly Rate Movement Report – Dec 2019
Posted : August 03, 2020

Dear All Cotton Friends,

In our mission to give Daily Spot Rate Team Gujcot is getting valuable support from Gujcot broker’s panel. We appreciated their humble service to the trade. Gujcot Team is giving daily closing of Indian and foreign futures rates.

In this report we have provided Following Rates during the month.

 

  • Daily Physical Spot Rate

 

  • MCX Cotton Daily Closing Rate

 

  • USD-INR Exchange Rate Closing

 

  • Cotlook Index

 

  • ICE Future Closing

 

  • NCDEX Kapas Rate

 

  • MCX Future Closing

 

  • NCDEX and MCX converted into Rs. Candy Rate

 

We hope it will be useful to all the stake holders of Textile Value Chain.

 

Conclusion

  • New Year Greetings to all cotton friends from Team Gujcot.
  • New Indian Cotton season started from 1st Oct-2019 and first quarter of the season is over. International cotton season starts from 1st August.
  • On International front throughout this quarter market mover was US-China Trade deal negation news.  On positive and negative news cotton market reacted very sharply. But overall it remained in positive territory.
  • Before the start of the Indian new cotton season, NY futures had lost the ground and had touched the contract low below 57 cents but it recovered before the start of Indian new crop arrivals. When the NY futures were at its low, India was facing crisis of low cotton inventory and Indian basis touched 2100 points on to nearby NY Future.
  • Huge brazil crop was game changer and was an option to US machine picked cotton with the comparative cheaper basis. Indian mills also had booked Brazilian cotton in the later part of the season 2018-19.
  • Worldwide slow off take of apparel and garments created cash crunch in the textile market. Higher Indian basis, costly imported cotton and slow off take created huge disparity to Indian spinners. When Indian spinners needed cotton very badly, CCI hoarded procured cotton under MSP and denied to sale or put non-viable rate of selling. Which caused Indian consumers a big loss in later part of the season.
  • Weather also remained uncertain. In the month of June Vayu cyclone gave some rainfall but after that there was a long dry spell of nearly 45 days in Gujarat. August September and October were full of rain. Even after the withdrawal of monsoon due to Maha cyclone many areas received rainfall.
  • New Cotton season has started late so Gujcot started giving new crop spot rate after 15th October. From start of the new season to till date there is a huge variation in grade of the cotton and which also reflect on rate.
  • Gujcot Spot Rate for 29 mm started with 41,500 (Old crop) and at 39,250 for new crop on 16th of October. New crop rates touched 39,500 on 4th November but fall back to bottom of till now to 38,350 on 21st November.  There after we saw a slow and steady upward move to close at 39,400 on 31st December.
  • Pink bollworm spread in majority of Saurashtra after mid-November and many farmers up rooted cotton for another crop. Plenty of ground water is available to farmers for second crop and also summer crop. Arrivals were also delayed and cotton quality issue became major concern specially in Saurashtra because of Pink Bollworm issue.
  • Indian Export was at slow pace. CCI procured nearly 25 lakh bales till 31st December with only around 1,50,000 bales from Gujarat.
  • Gujarat arrival was 2,59,799 running bales in October, 12,09,433 running bales in November and possibility 18,00,000 to 20,00,000 in December so total arrival in Gujarat will touch near 32,00,000 to 34,00,000 up to 31stDecember.
  • All India arrivals had crossed 1,30,000 bales till 31st December.
  • Indian basis started declining from 5.54 in October to 1.36 at the end of December. It was near flat to 200 on. Lower Indian basis can help boost Indian cotton and yarn Export.
  • At the end of the last season cotton seed was the hero of ginners seed rate crossed Rs 4,000 per quintal at one time. As arrival picked up, cotton seed rates gradually declined and touched around 2,250 Rs per quintal once. But with some international support in oil policy and bottom price support in oil cake again cotton seed prices recovered to 2700 to 3000 Rs. per quintal. Cottonseed price was also supported with hoarding of seed by CCI also. As cotton seed price fluctuation was main part of ginners’ parity.
  • Next quarter will be decisive for trend.
  • First phase of US-China Trade deal is scheduled to be signed on 15th of January. On any positive development Kapas rates may cross MSP which will restrict CCI procurement and flow to the open market can increase in next quarter.
  • Indian basis remained in 0.65 to 7.53 range from 16-Oct-2019 to 31-December-2019 on the nearest NY Future.
  • Indian Rupee remained between 70.69 to 72.09 against USD during this month.
  • Let’s hope for the best.

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