THIRD QUARTERLY RATE MOVEMENT 2020-21
Posted : October 23, 2021
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.
- Third quarter of season was volatile and somewhat market friendly for Indian stakeholders. Particularly from second week of May to second week of June has created a new history in Indian cotton price. As a flat it Increase nearly 5,700 Rs. a candy but jumped by basis form negative 11.3 to positive 3.5 points. Usually up or down come parallel to international cotton market but because Indian cotton price was highly undervalued it jumped 1,400 basis points in just 30 days. It was a big opportunity for basis players.
- NY Futures July was leading contract at start of April was trading around 79 cents and rose to 96 and ended in mid-80’s at the end of the quarter. December was lead month from June and it also stayed and volatile between 80 to 90 cents and ended in mid-80’s zone at the end of the quarter.
- Supported by excellent Export Sales, USDA raised US Export target to 16.5 million bales and till date commitment is higher than USDA export target. Shipment is somewhat lagging behind and in now remaining 5 weeks it requires nearly 3.5 lakh bales shipment a week which seems difficult to achieve.
- All three WASDE reports were market friendly and ultimately reduced world and U.S. ending stock.
- China allocated some additional import quota to their mills which generated further buying from China and supported the market. Due to very low production in Pakistan, Pakistan remained a major buyer in international market.
- Despite lockdown in various countries cotton and textile demand sustained and market remained well supported.
- With big processing margins India mills are holding very high inventory. Genuine demand from spinning mills has absorbed excess supply of cotton from the market and cotton market advanced to a record high level.
- Due to full sales flow from CCI and MF, huge opening stock and fast arrivals has contributed to undervaluation of Indian cotton price. At one point of time Indian cotton was 1,300 points negative to nearby NY Future contract but as supply declined and mills continued building higher inventory, market came out from negative territory to positive territory.
- From Mid-May to Mid-June Indian prices has shoot up by Rs. 5,000 to 6,000 per Candy. CCI and Maharashtra federation nearly liquidated huge cotton stock and now CCI is holding 22 lakh and federation is holding below 1 lakh bales of stock.
- Indian MCX Cotton future started this quarter at around 21,200 almost touched 25,000 Rs a bale of 170 kg.
- Indian Rupee remained volatile in 72.50 to 75.00 range against USD.
- Indian Export was very good till May. From June onward Indian cotton became costly. As per DGCI data, till April end cotton export was 59 lakh bales including cotton waste.
- Indian mills are performing well they have good orders from abroad and are trying to run at optimum capacity.
- Indian ginner and farmers get double bonanza with huge increase in cotton and cotton seed rate. Cotton seed rate crossed Rs 4,000 per quintal and kapas touched Rs. 7,500 per quintal at the end of this quarter.
- Overall this quarter was smiling quarter to whole textile value chain.
- Hope for same be continue…