Business Daily from THE HINDU group of publications
Tuesday, Aug 29, 2006
Business Daily from THE HINDU group of publications Tuesday, Aug 29, 2006 |
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Agri-Biz & Commodities
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Cotton Global ELS cotton output likely to rise 24% G. Gurumurthy
On cards Production may increase to 7 lakh tonnes from 5.63 lakh tonnes. Offtake by consuming countries to rise to 4.55 lakh tonnes. Export of the extra long variety seen rising 26 per cent.
Coimbatore , Aug. 28 Global output of extra long staple (ELS) cotton is estimated to increase by 24 per cent to 7 lakh tonnes during 2006-07, owing to high prices and premiums. ELS cotton production during 2005-06 was only 5.63 lakh tonnes.
Estimate
According to the International Cotton Advisory Committee's (ICAC) monthly supply and demand estimate for ELS (August 2006), its consumption in production countries is forecast to increase by 18,000 tonnes to 4.55 lakh tonnes. Global export of ELS is expected to increase by 26 per cent to 3.86 lakh tonnes.
Price sensitive
The supply-and-demand position of ELS cotton, according to ICAC estimate, has been price sensitive in recent years and the world ELS cotton acreage declined by 14 per cent in 2005-06 to 6.45 lakh hectares, compared with 2004-05 when ELS cotton prices sharply declined. Due to unfavourable growing conditions, ELS yield fell to 5.63 lakh tonnes in 2005-06 and this tightened supply led to a price surge last season.
Reaction to premiums
Again, in reaction to the high prices and premiums seen in 2005-06, this year the crop is expected to be higher. The ICAC estimate has projected that Egyptian cotton production would remain stable during 2006-07 at about 2.03 lakh tonnes, whereas the US Pima cotton would rise by 42 per cent to record 1.94 lakh tonnes. ELS cotton production in other countries is forecast to increase by 34 per cent to 3.02 lakh tonnes. The ICAC has, however, projected that the ending stocks in producing countries would decline to a low of 1.25 lakh tonnes. It said the ELS cotton stocks-to-use ratio has slid every season — from 56 per cent in 2001-02 to a projected 15 per cent in 2006-07. This ratio had remained at an average of 45 per cent between 1990-01 and 2000-01.
More Stories on : Cotton | Commodity Markets
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