 Last night in New York futures market, March 2009 closed at 49.71 with a gain of 30 points while the volume traded was 7761 contracts and May 2009 closed at 50.80 with a gain of 36 points and the trading volume was 5247, while July 2009 closed at 51.91 with a gain of 40 points and the trading volume was 1886 contracts. The Cotlook A index was declared settled at 58.30 with a loss of 40 points.
The spot rate at KCA remained firm and strong, so the settlement declared at Rs 3350 per maund as it was the other day with no changes today. In the local market 1000 bales of Shahdadpur sold at Rs 3300, 800 bales of Hala sold at Rs 3275, 2,000 bales traded in Sadiqabad at Rs 3300 and Rs 3400, 1,000 bales changed hands in Tahim Yar Khan in a range of Rs 3300 to Rs 3400, 400 bales of Duniyapur sold at Rs 3450, 4,000 bales of Vehari sold at Rs 3400, 400 bales of Fort Abbas sold at Rs 3325, 1000 bales of Ahmedpur sold at Rs 3450, 600 bales of Bahawalpur sold at Rs 3450 and 800 bales of Nurpur sold at Rs 3400 .
World cotton trade is expected to drop by 21 percent to 6.6 million tons in 2008/09. Cotton imports are affected by lower demand from consuming countries and lower production in exporting countries. China (mainland), the largest cotton importer, is expected to receive 1.5 million tons this season, 41% less than in 2007/08. India and Uzbekistan, the second and third largest exporters, are expected to ship around 40% less cotton this season than last. However, the largest exporter will be relatively less affected by the drop in demand: the United States is expected to ship 2.6 million tons in 2008/09, or 12% less than last season, despite a sharp drop in production.
The ICAC price model 2007 is forecasting a 16% decline in the season-average cotlook a index in 2008/09, to 61 cents per pound, with a 95% confidence interval between 56 and 66 cents per pound. World cotton area is projected to continue to decline in 2009/10. Declining cotton returns, more attractive prices for competing crops, and expected difficulties to finance production inputs are encouraging farmers to continue switching to alternative crops. World cotton production is expected to decrease by 1% to 23.4 million tons in 2009/10.
US cotton under loan as of January 27th increased to 142,300 bales to total to 7,067,778 upland bales. All cotton under loan totaled 7,279,276 bales. There were 1,267,027 bales under form ‘a’ and 9,458,422 under form ‘g’.
In an article from Dow Jones, “China’s cotton output in 2008 exceeded 7.5 million metric tons, down 1.6% from 2007. Cotton is the only major agricultural product which saw a decline in output last year. The government’s figure was lower than the China Cotton Association’s earlier estimate of 7.8 million tons. Output in 2007 totaled 7.62 million tons, according to the National Bureau of Statistics. Meanwhile, industry participants expect Chinese cotton acreage to fall this year, following a drop inprices on weak demand for textiles.”
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