Home / Knowledge / News / Textiles / Low stocks should keep quotes firm in 2011
Low stocks should keep quotes firm in 2011
18
Jan '11
2011 looks promising for cotton growers in Brazil and in the world. Ending stocks are low and although supply surpassed consumption in the 2010/11 season, this scenario will not be enough to bring the ratio stock/consumption to a comfortable level. In this context, prices (domestic and international markets) are expected to remain firm. As a result, producers should keep increasing the planted area for the 2011/12 crop.

On balance, high prices in 2010 surprised agents; however, many Brazilian sellers did not take advantage of these levels, since part of the production of the 2009/10 season had been traded previously. For the 2010/11 crop, Brazilian producers are optimistic and will try to take advantage of high prices by increasing planted area and advancing trades.

Quotes soared in the first days of 2011, registering the highest daily variation since data from CEPEA - Center for Advanced Studies on Applied Economics began, in 1996. On Jan. 5, the CEPEA/ESALQ Index for cotton type 41-4 (delivered in São Paulo city, payment in 8 days) picked up 6.21 percent, closing at 3.1113 reais or 1.8586 dollar per pound. Between December 30 and January 14, the CEPEA/ESALQ Index for cotton picked up 16.81 percent, to close at 3.4048 Real or 2.0194 dollars per pound on Jan. 14.

In the world market, the USDA forecasts the 2010/11 season to increase roughly 14 percent compared, reaching 25.2 million tons. However, production in China and Pakistan (two major producers) should shrink.

Regarding consumption, agents expect that the higher prices will lead to the replacement of raw material, pushing down the demand for cotton. Among major world consumers, China could reduce demand in 6 percent and Pakistan, in 5.5 percent, according do data from USDA.

The Icac (International Cotton Advisory Committee) estimates that world consumption in the 2010/11 crop should be stable, at 24.7 million tons. Regarding world production, Icac forecasts 25.14 million tons, against 21.6 million in the previous season. This could contribute to increase ending stocks, which might reach 9.4 million tons. Even so, the ratio stock/consumption should go from 36 to 38 percent, still below the average of the last ten years.

In Brazil, Conab (National Company for Food Supply) estimates that the planted area may increase 45.3 percent compared to the 2009/10 crop, reaching 1.2 million hectare. Production should be 53.7 percent higher, totaling 1.835 million tons, a record. Yield will probably rise 5.7 percent than that verified in the previous season, reaching 1.511 kilo per hectare.

Data from BBM (Brazilian Commodity Exchange) indicate that, until Dec. 30, roughly 88 percent of the 2009/10 season had already been traded – 60 percent was allocated to the domestic market and 40 percent, to exports. For the 2010/11 crop, around 766 thousand tons have already been traded (66 percent to exports and 34, to the domestic market).

CEPEA - Center for Advanced Studies on Applied Economics

Must ReadView All

Textiles minister Smriti Irani at a press conference with minister of state for textiles, Ajay Tamta, the principal director general (M&C), PIB, AP Frank Noronha and other dignitaries. Courtesy: PIB

Apparel/Garments | On 23rd May 2017

Special package for knitwear coming soon: Irani

Union textiles minister Smriti Irani said that the government of...

Apparel/Garments | On 23rd May 2017

Apparel, footwear use may rise by 63% in 2030: Report

The apparel and footwear consumption is projected to rise by 63 per...

Apparel/Garments | On 23rd May 2017

Gap Inc earns $3.4 bn in net sales in Q1 FY17

Gap Inc's net sales for the first quarter of fiscal year 2017 were...

Interviews View All

Darshan Mehta
Infinium Polychem

We are spending double digit figures on R&D

Amit Jain
Shingora Textiles Ltd

‘In terms of fabric, the fastest growing category for us is a blend of...

Kamlesh Vaghela
RK Textiles

Very few machinery manufacturers have R&D units

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
May 2017

May 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search