Cotton exports jump 137% in Oct-March 2023-24
PRICE PULL. Competitive prices attract buyers from countries such as Bangladesh and Vietnam Cotton futures peaked at 102 cents per pound in March but have since fallen to around 80 cents. Domestic prices have similarly decreased from ₹61,000 to nearly ₹58
India’s cotton exports in the first six months of the season 2023-24 starting October have more than doubled with prices turning competitive for the overseas buyers.
Exports during OctoberMarch were up 137 per cent at 18 lakh bales compared to the 7.59 lakh bales logged in the same period last year , per the latest estimates released by the Cotton Association of India (CAI), the apex trade body. India had exported 15.59 lakh bales during the 2022-23 season.
CAI President Atul Ganatra said the Indian prices were competitive during the October-March period contributing to the higher exports. “Our prices were lower by ₹3,000-4,000 per candy than the international price for some time,” he said.
However, with the global prices easing in the recent weeks, the Indian prices are
Multinationals such as Louis Dreyfus Company, Viterra and Olam have been aggressively ooading their stocks in the Indian market
now at par or slightly costly compared with the Cotlook Index, Ganatra said. For the current 2023-24 season ending September, CAI estimates the cotton exports to be over 22 lakh bales. The trade body is likely to revise its export projections on June 10 at its national crop committee meeting in Ludhiana, based on the shipment data till May-end and also on the inputs of the 60odd stakeholders.
ROBUST DEMAND
Meanwhile, demand for India cotton continues to be strong from buyers in countries such as Bangladesh and Vietnam among others. “Bangladesh buyers prefer Indian cotton as it is competitive and also due to faster delivery,” said
Ramanuj Das Boob, a sourcing agent in Raichur, Karnataka.
Das Boob said the multinationals such as Louis Dreyfus Company, Viterra and Olam among others have been aggressively oloading their stocks in the Indian market, which is being picked up by the local trade.
From a high of 102 cents per pound on ICE in March, the cotton futures have eased to currently hover around 80 cents, while the domestic prices have come down from ₹61,000 a candy to around ₹58,000 levels during the period.
The domestic prices in India are very competitive for the MNCs to o®oad in the Indian market, Das Boob said adding that movement of prices, which are steady now, will depend on the ICE futures going forward.
BALANCE SHEET
Meanwhile, CAI has retained its pressing estimate for 2023-24 at 309.70 lakh bales (of 170 kg each) even as consumption is seen picking up in the domestic market. Consumption till March end was estimated at 165 lakh bales — higher than the previous month’s 135.70 lakh bales. Domestic otake for the year-ending September 2024 is estimated at 317 lakh bales.
CAI estimates total supply in the country till March end at 297.03 lakh bales, consisting of market arrivals of 263 lakh bales, imports of 5 lakh bales and the opening stock of 28.90 lakh bales. Stocks at the end of March 2024 was estimated at 114 lakh bales.
This includes 47 lakh bales of stocks with the textiles mills, equivalent to 51 days consumption and remaining 67.03 lakh bales with Cotton Corporation of India, Maharashtra Federation and trade. Supplies for the year-ending September 2024 are estimated at 359 lakh bales.
Akhil Nallamuthu
Aluminium futures on the Multi Commodity Exchange (MCX) remained steady over the past week. As the April futures are nearing expiry, we consider the May contract for analysis and trade recommendation.
The May aluminium futures hit a high of ₹244 early this week. But then the contract moderated and it closed at ₹236.8 on Wednesday.
The broader trend remains up. From the current level, the nearest support is at ₹228, where the 20-day moving average lies. Below this, aluminium futures can find support at ₹224. Subsequent support is the 50day moving average at ₹215.
On the other hand, the nearest resistance from the current level is at ₹250. Resistance above ₹250 is at ₹258.
TRADE STRATEGY
Last week, we recommended a buy in April aluminium futures at ₹237. Traders can consider rolling over to the May contract. That is, exit longs in April now and simultaneously buy May aluminium futures.
Add longs in May contract if the price dips to ₹228. Place stop-loss at ₹222. When the contract surpasses ₹245, tighten the stop-loss to ₹238. Book profits at ₹250.