India Cotton Association
As per CAI presentation at Ludhiana national crop committee meeting on dt 14 th june
Bullish Factors for the Indian Cotton Market (June 2024 to October 2024)
1. Hike in Indian Cotton MSP: The government is likely to increase the Minimum Support Price (MSP) for cotton by 5 to 10%.
2. Shortage of Sowing Seed: India requires 450 lakh sowing packets, but only 300 lakh packets are available.
3. Reduction in Cotton Sowing Acreage: More land is being allocated to other crops, reducing cotton acreage.
4. Increase in Cotton Consumption: If large mills decide to stock up on old cotton for October/November, smaller mills may face a shortage.
5. Tight Cotton Balance Sheet: A tighter balance sheet could influence market dynamics.
6. Consistent Export Shipments: Exporters are continuing to ship 1 to 1.5 lakh bales per month.
7. Delay in Import Shipments: Any delays could impact supply.
8. Increase in Yarn Prices: Higher yarn prices will drive up cotton prices.
9. Water Shortage: Early sowing percentages have drastically reduced due to water shortages.
10. Delayed Sowing in North India: Sowing is down by 30-35% and delayed by a month, with new arrivals expected in the first week of October if conditions improve.
11. Weather Risks: Adverse weather in India or other major cotton-growing countries could impact production.
12. Delayed Crop Arrivals: Delays in sowing will push back new crop arrivals.
13. Marketing Policies: The strategies of MNCs and the CCI need careful monitoring.
14. Pent-Up Demand: Improved geopolitical situations may dry up supply chain pipelines.
15. US Federal Bank Interest Rate Cut: A cut could lead to bullish trends in all commodities.
16. Depression in Dollar Index: A weaker dollar could boost commodity prices.
Bearish Factors for the Indian Cotton Market (June 2024 to October 2024)
1. ICE Futures Fall: If December 24 ICE futures fall below 70 cents, Indian cotton prices will decline.
2. Slow Demand for Cotton Yarn and Cloth: Reduced demand will negatively impact prices.
3. Spinning Mills Losses: If spinning mills start losing Rs.20 per kg on yarn, they will reduce cotton consumption.
4. Competition from Man-Made Fibers: These fibers are competing with cotton.
5. Large Crops in the USA, Brazil, and Australia: These countries' large crops will prevent cotton prices from rising significantly.
6. China's Economic Conditions: Economic instability due to simultaneous global conflicts could affect demand.
7. Retailers’ Cautious Inventories: Uncertainty is leading retailers to avoid building large inventories.
8. Hand-to-Mouth Operations: Most cotton spinning mills worldwide are operating on minimal inventories.
Read More :> Cotton Factory Owners and Ginners Express Concern Over Decrease in Crop Area
Regards
Team Sis
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