Co˜on - Crop Survey And Market Outlook 2016 - Crop Survey And Market Outlook 2016 From the denim you wear to the bed sheet you slide into, the myriad uses of this soft, fluffy fiber

Co�on - Crop SurveyAnd

Market Outlook 2016

Co�on - Crop SurveyAnd

Market Outlook 2016

Cotton - Crop SurveyAnd Market Outlook 2016

From the denim you wear to the bed sheet you slide into, the myriad uses of this soft, fluffy fiber called Cotton,

is nothing but stupendous. If you trace the journey of this wonderful crop from pre-historic times to the

present era, you will realize that no other fiber in this world have shaped our lives as cotton did. India surpassed

China last year to become the largest cotton producer in the planet. At this juncture, it will be both interesting

and challenging to deconstruct the status of cotton as a globally traded commodity.

Will ‘The White Gold’ lose its lustre?

Crop Calendar

Domestic Scenario

Sowing Estimates

Source: Ministry of Agriculture, NB Research, *Estimate

Kunal Shah

Head - Commodity Research

Nikhil Murali

Research AnalystCotton | Pulses | Sugar

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecIndiaChinaUSAPakistan

Sowing Growing Harvesting

In India, cotton is basically grown as a Kharif crop which requires 6 to 8 months to mature. Depending upon the

climatic conditions, the sowing window and harvesting differs in different parts of the country. In Punjab and

Haryana it is sown in April-May and is harvested in December-January that is before the winter frost can

damage the crop. In some other parts of the country, it is sown till October and harvested between January and

May. In Tamil Nadu, it is grown both as a Kharif and a Rabi crop.

State

Punjab

Haryana

Rajasthan

Northern Zone

Gujarat

Maharashtra

Madhya Pradesh

Central Zone

Telangana/AP

Karnataka

Tamil Nadu

Southern Zone

Others

Total

2015-16*

4.4

5.27

3.9

13.57

27.6

38.6

5.5

71.7

23.6

5.7

1.25

30.55

1.5

117.32

2014-15

4.5

6.3

4.18

14.98

30.05

41.3

5.7

77.05

24.6

7.6

1.2

33.4

1.6

127.03

Cotton Acreage (In Lakh Hectares)

2

13 May, 2016th

Supply Scenario

Production


Last year, around 127.03 lakh hectares were under cotton cultivation across the country. In 2015-16 crop

season, we estimate it to be around 117.32 lakh hectares, i.e. around 7.6% less than last year.

With a production of 380 Lakh bales last year, India pipped China as the largest producer of cotton in the world.

But the picture is dismal in the current season (2015-16) due to the severe crop loss occurred in the North

Indian cotton belt which includes Punjab, Haryana and Rajasthan. The whitefly pest attack damaged most of

the cotton crop in these states which will curtail the overall production in this region by at least 40%. The

situation in Gujarat, the largest cotton producing state, was also gloomy as the Saurashtra region came under

Pink Bollworm attack and Sukaro (Para wilt disease).

Whitefly – The harbinger of calamity

A tiny, snow-white insect pest called Whitefly wreck a havoc this year in Punjab and Haryana, making the cotton

fields into mines of nightmares for the farmers. We can trace the roots of this epidemic to early 2007 when it

made headlines in Pakistan, affecting the cotton fields in its Punjab province. Within two years, to be more

precise in 2009, it spread to the cotton fields in Abohar district of Punjab which shares border with Pakistan

resulting in 60-70% crop loss that year. The judicious use of pesticides kept whitefly at bay for the years that

succeeded. But when everyone thought that the pest is under control, it hit hard again in 2015-16 crop season

by affecting 50% of the crop in Punjab and Haryana. The regions adjoining Pakistan like Fazilka and Abohar

were severely affected. Different theories came up explaining the root cause of the pest attack; some people

blaming the Bt Cotton seed, some others blaming spurious pesticides and others putting the blame on the

vagaries of nature. According to our analysis, the more logical and rational explanation to this is the fact that

the untimely rains led to the wide spreading of the pest attack. Nowadays, the months of July and August are

dry spells which was not the case normally. When it rained after this prolonged dry spell, it worsened the

situation. The late sowing of the crop in Punjab (sown after 15-30 days than normal period) made the crop

more susceptible to the pest attack.

In the 1990s and early 2000s, the “American Bollworm” attack left the cotton farmers in both Haryana and

Punjab in distress. Post-2005, after the government gave sanction for Bt Cotton cultivation, most of the farmers

in both these states shifted from Desi hybrid cotton varieties to Bt Cotton as an attempt to safeguard their crop

from the pest attack. Bt Cotton not only resisted the bollworm attack but increased the yields manifold. Though

the cost of cultivation increased over a period of time, the increase in yields ultimately made profits to the

farmer. As if now, about 90% of the cotton cultivated in both these states are of Bt Cotton variety. So the recent

Whitefly pest attack which showed us that even Bt Cotton is vulnerable to it, will gain alarming dimensions as

a major menace in the coming years also if some concrete steps are not taken in this regard.

Cotton is grown in India in 3 distinct agro-ecological zones- Northern Zone (Haryana, Punjab & Rajasthan),

Central Zone (Gujarat, Maharashtra & Madhya Pradesh) and Southern Zone (Telangana/Andhra Pradesh,

Karnataka & Tamil Nadu).

3

13 May, 2016th

North Zone

Haryana

Source: - Ministry of Agriculture, NB Research, *Estimate

With a production of 22 lakh bales last year, Haryana is the largest cotton producing state in North India.

The areas adjoining Punjab and Rajasthan – Sirsa, Fatehabad and Hisar constitute the main cotton growing belt

of Haryana. More than 80% of the total state production comes from this belt only.

Year

2015-16*

2014-15

Area (la ha)

5.27

6.3

Yield (kg/ha)

435.48

601.75

Production (lakh bales)

13.5

22.3

This year, we estimate the acreage to be around 5.27 lakh hectares and the production to be 36% less than last

year which amounts to 13.5 lakh bales due to the widespread whitefly pest attack.

4


13 May, 2016th


Raw Cotton In A Ginning Unit In Sirsa, Haryana

5

13 May, 2016th

Punjab


Punjab is the worst hit state by White fly pest attack this year. Around 60% of the total area under cotton

cultivation has been fully or partially affected by the pest attack.

The districts of Fazilka and Firozpur were the worst ones affected by the pest attack. In Fazilka alone, around 1

lakh acres have been affected by white fly pest attack out of a total of 2.5 lakh acres under cotton cultivation.

Year

2015-16*

2014-15

Area (la ha)

4.4

4.5

Yield (kg/ha)

231.82

453.33


6

12


6

13 May, 2016th

Rajasthan


Arrivals at Bhucho mandi, Punjab

We estimate this year’s production to be restricted to 6 lakh bales which is around 50% less than last year’s

figures.

The white fly pest attack was not prominent in Rajasthan as observed in both Haryana and Punjab. But

considering the pest attack in the northern part of Rajasthan which is the major cotton growing belt of the

state, we expect the production to be around 35% less than last year.

The Upper Rajasthan belt is the major cotton growing region of Rajasthan with Sri Ganganagar district

contributing to around 80% of the total production of the state.

7

13 May, 2016th



Year

2015-16*

2014-15

Area (la ha)

4.18

3.9

Yield (kg/ha)

406.70

697.44


10

16

We estimate the production in this season to be around 10 lakh bales.

Arrivals At Sri Ganganagar Mandi

Central Zone

Gujarat

The black soil of the plains of Gujarat is ideal for cotton cultivation. So it’s not surprising to digest the fact that

with a production of 108 lakh bales last year, Gujarat is the largest cotton producing state of our country.

8

13 May, 2016th


The Saurashtra region comprising the districts of Jamnagar, Rajkot, Junagadh, Surendranagar and Amreli is the

major cotton growing belt of Gujarat contributing two-thirds of the total production. The yield of the cotton

crop is high compared to other states as around 57% of the total area under cotton cultivation is irrigated.


Year

2015-16*

2014-15

Area (la ha)

27.6

30.05

Yield (kg/ha)

585.14

616.64


95

109

If Whitefly pest played the spoilsport in the North Indian cotton belt, Pink Bollworm and Para wilt disease

(Sukaro) did the job in the Saurashtra region which will curtail this year’s production by around 12% from last

year’s figures. So we expect this year’s production to be in the range of 95 lakh bales.

9

13 May, 2016th

Maharashtra

Cotton cultivation in Maharashtra has a history which dates back to ages. The lava soil of the Deccan plateau is

ideal for cotton cultivation and is thus commonly known as the ‘black cotton soil’. For many years, Maharashtra

was the largest cotton producer with a share of more than 30% of the country’s cotton production. But over a

period of time Gujarat surpassed Maharashtra to become the largest cotton producing state. Though

Maharashtra still has the largest area under cotton cultivation, the yields are too low compared to Gujarat and

other states. This year also with 38.6 lakh hectares under cotton cultivation, it is the largest cotton growing

state but the production is expected to be around 77 lakh bales which will make it the second largest cotton

producer after Gujarat.


The Vidarbha region comprising Yavatmal, Nagpur, Akola, Buldhana and Wardha; Marathwada region

comprising Nanded, Parbhani, Beed, Jalna and Aurangabad and Khandesh region comprising Jalgaon and

Dhule are the major cotton growing areas of Maharashtra. The yield of the cotton crop is pretty low compared

to other states as only 3% of the area under cotton cultivation is irrigated.


Year

2015-16*

2014-15

Area (la ha)

38.6

41.3

Yield (kg/ha)

332.51

319.01


75.5

77.5

Though Marathwada region was reeling under drought this year also, fortunately it hasn’t affected the cotton

crop much. So we expect this year’s production to be in the range of 75-76 lakh bales almost in tandem with

last year’s figures of 77.5 lakh bales.

10

13 May, 2016th

Madhya Pradesh

Madhya Pradesh, with a production in the range of 17-18 lakh bales per year is not a major player compared to

Gujarat and Maharashtra. But the fact is that the cotton cultivation in Madhya Pradesh dates back to ages.

The Nimar region of Madhya Pradesh has a long history of cotton cultivation. It includes Khargone and Barwani

districts (West Nimar) and Khandwa and Burhanpur districts (East Nimar). Still this area is the largest cotton

growing region of Madhya Pradesh. Apart from that, the Malwa region comprising the districts of Dhar, Jhabua,

Ratlam, Dewas and Ujjain is a major cotton growing area.



Year

2015-16*

2014-15

Area (la ha)

5.5

5.7

Yield (kg/ha)

525.45

551.75


17

18.5

No major pest infestations or crop disease were reported from Madhya Pradesh till now. So we expect this

year’s production to be in the range of 17-18 lakh bales as expected.

11

13 May, 2016th


South Zone

Telangana & Andhra Pradesh

With a combined production of 84.5 lakh bales last year, this is the largest cotton growing tract of South India.

Guntur district, located in lower Krishna valley and the neighbouring district of Prakasam comprise the major

cotton growing belt of Andhra Pradesh. Districts of Kurnool and Anantapur also have a sizeable contribution

to the whole. Adilabad and Warangal districts are the major cotton growing areas of Telangana. Around 3.5 lakh

hectares of land is under cotton cultivation in Adilabad district alone.

Crop condition(2015 -16 Crop Year)- Warangal, Telangana

From a meager share of 2-3% of share in the total cotton production of the country in 1970s, we saw a sea

change in the sector in the later part of the century which made the cotton production to exponentially rise to

contribute more than 20% of the total cotton production of the country. The quality of the cotton (Long staple

12

13 May, 2016th


Karnataka

variety) is also laudable.


Year

2015-16*

2014-15

Area (la ha)

23.6

24.6

Yield (kg/ha)

572.67

583.94


79.5

84.5

We estimate the production to be around 79.5 lakh bales this season.

Karnataka is fast emerging as a major cotton producing state of South India with a contribution of around 8%

of the total cotton production of the country.

13

13 May, 2016th


The North Karnataka Plateau which includes the districts of Gulbarga, Raichur, Bellary and Dharwad is the

major cotton growing region of Karnataka. Unfortunately, the whole of Northern Karnataka witnessed drought

this year which led to crop loss and decreased yields.


Year

2015-16*

2014-15

Area (la ha)

5.7

7.6

Yield (kg/ha)

581.58

709.08


19.5

31.7

So we expect this year’s production to be around 19.5 lakh bales i.e. around 35% less than last year’s figures.

Tamil Nadu

Even though Tamil Nadu doesn’t contribute even 2% to the total cotton output of our country, it plays a major

role in the cotton industry with its high quality long staple cotton and innumerous textile mills. Of the 2500

textile mills of the country, 800 are situated in Tamil Nadu and out of that 300 are in Coimbatore district alone.

This fact bestowed Coimbatore the epithet- “Manchester of South India”.

14

13 May, 2016th


Coimbatore district alone contributes more than 30% of the total production of the state. Other than that the

major cotton growing regions are Salem, Madurai, Tirunelveli, Virudhnagar, Ramanathapuram, Tiruchirappalli

and the former South Arcot area.


Year

2015-16*

2014-15

Area (la ha)

1.25

1.2

Yield (kg/ha)

544.00

637.50


4

4.5

We expect this year’s production to be in the range of 4 – 4.5 lakh bales which is in tandem with last year’s

figures as there were no reports of pest infestations or crop disease from any of the major crop growing

regions.

Overall Outlook

Imports

By analyzing the crop conditions in the three major cotton growing zones, we expect this year’s cotton output

to be in the range of 320 – 325 lakh bales i.e. about 15% less than last year’s output.

Source: NB Research, CCI, CAB; *Estimate

State

Punjab

Haryana

Rajasthan

Northern Zone

Gujarat

Maharashtra

Madhya Pradesh

Central Zone

Telangana/AP

Karnataka

Tamil Nadu

Southern Zone

Others

Total

2015-16*

6

13.5

10

29.5

95

75.5

17

187.5

79.5

19.5

4

103

3

323

2014-15

12

22.3

16

50.3

109

77.5

18.5

205

84.5

31.7

4.5

120.7

4

380

Cotton Production - India (In Lakh Bales)

Being the largest producer of cotton, India obviously doesn’t resort to major cotton imports. Then also, India

used to import ELS (Extra Long Staple) cotton from USA, Australia and some West African nations.

15

13 May, 2016th

Demand Scenario

Exports

Imports

Source: USDA; Yearly data is considered instead of crop season.


We expect the imports to surge from 15 lakh bales in 2014-15 season to 19 lakh bales in the current season. The

import from West African nations is estimated to be around 10 lakh bales

The major demand for cotton comes obviously from the textile industry. More than 90% of the cotton

produced is consumed by Mills only. If you analyze past 5 years’ data, it’s clearly visible that the consumption is

on an increasing note year-on-year.

Source: Ministry of Textiles, NB Research,*Estimate

2014-15

274

23

8

305

2015-16*

278

26

10

314

Domestic Consumption (In Lakh Bales)

Mill Consumption

Small Mill Consumption

Non-Mill Consumption

Total Consumption

We expect the domestic consumption to increase by around 3% to reach 314 lakh bales this season.

0

2

4

6

8

10

12

14

16

18

2010 2011 2012 2013 2014 2015

Lakh

Bal

es

Imports

We expect that the favorable export parity existing in the market will boost the exports this season. China was

our largest export destination for the past few years. But the huge stockpile of cotton (12 million bales

approximately) possessed by them as part of a government run cotton procurement programme which ran

from 2011 to 2014 dampened their export appetite. Fortunately, Pakistan emerged as a major exporter of

Indian cotton because of the crop loss occurred in its Punjab and Sindh provinces. This renewed interest from

Pakistan has compensated the decline in demand from China. Fresh demand from Bangladesh and Vietnam is

also giving impetus to our exports.

16

13 May, 2016th

Domestic Cotton Balance Sheet (In Lakh Bales)

Source: Ministry of Commerce, NB Research; *Estimate **Forecast; Crop Year: - Oct-Sep

Country

China

Bangladesh

Vietnam

Pakistan

Taiwan

Indonesia

Turkey

Thailand

Belgium

South Korea

ROW

Total

2014-15*

24.3

17.4

7.9

3.7

1.35

1.29

1.02

1.02

0.45

0.42

4.3

63.15

2015-16**

7.5

18.5

10.35

21.5

1.65

1.48

1.25

1.35

0.5

0.45

5.5

70.03

India Export Statistics to World (In Lakh Bales)

Source: - CAI, CAB, NB Research; *Estimate, **Forecast; Crop Year: - Oct-Sep

Domestic Cotton Balance Sheet

So we expect Pakistan to be our largest export destination followed by Bangladesh, Vietnam and China.

Considering the above discussed factors, we expect the exports to touch 70 lakh bales this season, i.e. a modest

increase of 7 lakh bales from last year’s figures.

Particulars

Supply

Opening Stock

Production

Imports

Total Supply

Demand

Mill Consumption

Small Mill Consumption

Non-Mill Consumption

Total Consumption

Exports

Total Demand

Ending Stock

Stock to Use Ratio

2014-15*

49

380

15

444

274

23

8

305

63

368

76

24.92

2015-16**

76

323

19

418

278

26

10

314

70

384

34

10.83

17


13 May, 2016th

Global Scenario

Production

China

According to our analysis, the total supply in the market is going to be badly affected while the total demand

is expected to surge in this season. So in the light of this, we expect the ending stock to reduce to 34 lakh bales

in 2015-16 owing to less production and increased demand.

With a production of 6.05 million tonnes, India pipped China to become the largest cotton producing country

in the world this year. According to USDA, the world cotton production (2016/17) is expected to rise 4 percent

to 105.5 million bales. On the other hand the production forecast of 2015/16 is lowered due to a smaller crop

in India.

There are three main cotton producing regions in China: - The Yangtze river basin, Yellow river basin and the

Northwestern inland areas. But over the past few years, cotton production in China is shifting from the

traditional tracts of Eastern China – Shandong, Henan, Hebei, Tianjin, Jiangsu, Hubei, Anhui, Hunan, Shanxi, and

Jiangxi to the Western region of Xinjiang where more large tracts of land is available, labour rates are lower and

people have access to transport subsidies for shipping the raw material to the factories in the East. While the

cotton processing plants are mainly concentrated in the provinces of Hubei, Hebei, Shandong and Xinjiang, the

textile manufacturing plants are located near large cities near the eastern coast – Beijing, Hebei, Shandong,

Liaoning (Northeastern region), Jiangsu, Zhejiang, Shanghai (Eastern region) and Guangdong (Southeastern

region). Organic cotton production, though in nascent stage is also slowly picking pace in certain regions of

Xinjiang province.

18


13 May, 2016th


For the past 5 years, China was reigning as the largest cotton producing nation in the world. But China lost this

status to India this year and is expected to remain at this position in the coming crop season also. The major

reason is that the acreage is expected to decline by at least 10 % this season as the huge cotton inventory

possessed by them is hanging like a sword of Damocles.

It all started in March 2011 when the Chinese government as part of their new agricultural reforms aimed at

improving the livelihoods of domestic cotton farmers, started procuring cotton at a set price above those set

by the global market. This cotton subsidy programme ended last year with China holding around 12 million

tonnes of cotton i.e. around 60% of the global cotton stockpile! The quality of the cotton in the warehouse

deteriorating day by day, high inventory costs and the decline in global cotton prices altogether put China in

a fix. Eventually it became the need of the hour to dispose/offload the cotton stockpile at any cost. So in

July-August 2015, National Development and Reform Commission, an economic planning and development

arm of China, held auctions to offload at least 1 million tonnes of cotton. But it could sell only 63,413 tonnes as

the buyers considered floor price quoted to be too high when compared with the quality of the cotton offered.

Taking a cue from the past, they are planning to hold second series of auctions from middle or end of April with

some high quality cotton on offer and a reasonable floor price. If they are keeping up their word, we can expect

some serious buying interest from the market participants which may help China in offloading a chunk of their

cotton stockpile.

As all this issues were brewing in the backyard, China tightened its import quotas for cotton to control the glut

in the market. The imports have dried up so badly that China, the top cotton importer for the past few years is

giving away its top spot to Bangladesh which is racking up its imports year-on-year. According to International

Cotton Advisory Committee, the Chinese cotton imports are expected to fall from 1.8 million tonnes last year

to around 1.08 million tonnes this season.

Imports

Source: USDA

0

5000

10000

15000

20000

25000

30000

2010 2011 2012 2013 2014 2015

Qua

ntity

in 1

000

480

lb B

ales

Imports

19

13 May, 2016th


As visible from the graph given above, in 2011 China imported a staggering 24.5 million bales of raw cotton.

But the imports slowly started plummeting as China shifted its focus towards domestic procurement of cotton

as part of their Cotton subsidy programme. So from 2012 onwards the imports showed a downward trajectory

which resulted in a meager 5.5 million bales in 2015. From the start of 2016 also China is following the same

policy of cutting down imports. We expect that China will maintain this policy till it is able to offload its huge

stockpile of cotton.

USA

USA, with a production of 3.5 million tonnes last year is the third largest cotton producer in the world.

Basically, cotton is grown in 4 major geographic locations: - the Southeast (Alabama, Florida, Georgia, North

Carolina, South Carolina and Virginia), Mid-South (Arkansas, Louisiana, Mississippi, Missouri and Tennessee),

Southwest (Kansas, Oklahoma and Texas) and the West (Arizona, California and New Mexico) which is

collectively called the Cotton belt of USA.

About 95% of the cultivated cotton is of Upland variety and the rest is of American Pima variety. The state of

Texas alone contributes around 25% of the total cotton production of USA. American Pima variety which is

Extra Long Staple (ELS) cotton is mostly restricted to the state of California.

According to USDA, the US cotton planted acreage is projected at 9.4 million acres i.e. around 10% more than

2015. This is due to the return of area prevented from being planted last season as a result of wet conditions.

But according to National Cotton Council’s Annual Early Season Planting Intentions Survey, the planted

acreage is expected to be 9.1 million acres i.e. around 6.2% up from 2015. Upland cotton intentions are 8.9

million acres, up 5.7 percent from 2015, while extra-long staple intentions of 208,000 acres represent a 31.2

percent increase. They attribute this increase mostly to the weaker prices of competing crops like Corn and

Soybean and improved expectations for water and favorable planting-time weather. It’s interesting to note

that US farmers’ psyche always respond to relative prices when making planting decisions. As the prices of

competing crops – Corn and Soybean are 8-10% below last year’s levels, cotton is still a safe bet even though

the prices are nose-diving due to an array of factors.

But we expect this to be a temporary phenomenon and prices are expected to gain momentum in the coming

years as the yarn demand is poised to pick up.

From the past few decades, the synthetic fiber industry is posing a great threat to the cotton industry with an

annual growth rate of about 8%. The plunge in crude oil prices is in a way a boon to the synthetic fiber industry.

This is because, the two key raw materials required for synthetic yarn manufacturing – Purified Terephthalic

Acid (PTA) and Mono-Ethylene Glycol (MEG) are derivatives of Crude Oil. So PTA and MEG futures witnessed

a dip in the Asian markets owing to the crash in crude oil price. This gave an impetus to the synthetic fiber

industry in Southeast Asian countries. But unfortunately, Indian manufacturers were not benefitted from this

easing of prices. Though the repercussions were not that evident in the Indian market, in the SE Asian markets

the synthetic fiber manufacturing got a much needed boost.

20

13 May, 2016th


Pakistan

About 95% of the cultivated cotton is of Upland variety and the rest is of American Pima variety. The state of

Texas alone contributes around 25% of the total cotton production of USA. American Pima variety which is

Extra Long Staple (ELS) cotton is mostly restricted to the state of California.

According to USDA, the US cotton planted acreage is projected at 9.4 million acres i.e. around 10% more than

2015. This is due to the return of area prevented from being planted last season as a result of wet conditions.

But according to National Cotton Council’s Annual Early Season Planting Intentions Survey, the planted

acreage is expected to be 9.1 million acres i.e. around 6.2% up from 2015. Upland cotton intentions are 8.9

million acres, up 5.7 percent from 2015, while extra-long staple intentions of 208,000 acres represent a 31.2

percent increase. They attribute this increase mostly to the weaker prices of competing crops like Corn and

Soybean and improved expectations for water and favorable planting-time weather. It’s interesting to note

that US farmers’ psyche always respond to relative prices when making planting decisions. As the prices of

competing crops – Corn and Soybean are 8-10% below last year’s levels, cotton is still a safe bet even though

the prices are nose-diving due to an array of factors.

Source: USDA; Season beginning August 1

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2011/12 2012/13 2013/14 2014/15 2015/16 (Mar)

2015/16 (Apr)

Qua

ntity

in 1

000

MT

Production

Exports

We expect US cotton production in the coming season to be in the range of 13-14 million bales (480-lb bales)

if the weather doesn’t play a spoilsport.

Cotton production in Pakistan dates back to ages. Being a traditional cotton producer and the 4th largest

producer of the world makes it worth to evaluate the scenario.

Cotton is a major industrial crop of Pakistan and is cultivated in 15% of the total arable land during the Kharif

season (May – August). Cotton cultivation is mainly concentrated to two main regions – Punjab province and

Sindh province; Punjab province rules the roost by contributing around 80% to the total production and the

rest comes from Sindh region. The cotton production in Pakistan took a hit this year owing to rampant whitefly

pest attack in the Punjab province and heavy rains and floods in Sindh province. Around 40% of the crop in

Punjab province is estimated to be damaged which will lower the output from this region by at least 50% to

touch 4.5 million bales. Due to floods in Sindh region, the crop output is estimated to be 3-3.5 million bales,

about 5-10% lower than last year. So overall, we expect the cotton production in 2015-16 crop season to be in

the range of 7.5 – 8 million bales.











21

Production And Export Figures

13 May, 2016th


Others

Pakistan generally produces Medium staple cotton and the truth is that it lacks in quality. So the major demand

for good quality long staple cotton is met through imports mostly from India and USA. Due to the less

production this season, Pakistan became a major importer of Indian cotton. Pakistan imported around 17 lakh

bales of cotton from India till now making it one of the largest export destinations for India

Imports

Source: USDA

0

500

223.

35%

1000

1500

2000

2500

3000

2010 2011 2012 2013 2014 2015

Qua

ntity

in 1

000

480

lb B

ales

Imports

The import of raw cotton rose a staggering 223.35% in 2015 to touch 2.7 million bales (480 lb bales) from a

meager 0.83 million bales in the previous year. But we don’t expect this much huge imports to happen in the

next year also as this was mainly due to the huge crop loss occurred this time.

Farmers in Pakistan don’t have more profitable alternatives than cotton at this point of time. So we don’t

expect farmers to shift to some other crop in the coming season. Hence, the cotton area is expected to remain

at 2.90-2.95 million hectares, almost same as last season.

Other major cotton producers are Brazil, Uzbekistan and Turkey. Brazil, the 5th largest cotton producer still

maintains its position as a major player in the industry. Being a Southern Hemisphere country, cotton planting

in Brazil occurs in Dec-Jan and harvesting in June-July. So the peak exports happen between the months of

August and December contrary to the US export season of May-July. This gives an indirect advantage to

Brazilian exports over US exports. Indonesia is the major export destination of Brazilian cotton. The

strengthening of Brazilian Real since 2004 reduced the cost of imported inputs and reduced the shipping costs

for Brazilian cotton exporters by increasing the availability of shipping containers. But the most important

factor which gave momentum to the Brazilian exports is the devaluation of Brazilian Real in January 2016. Over

the past few years, Uzbekistan, another major cotton producer is slowly losing its status as a major player in

the arena. Factors like food security issues, irrigation facilities, etc are behind this trend. China, Bangladesh,

South Korea, Russia and Indonesia are the major importers of Uzbek cotton. Cotton production in West African

countries like Benin, Mali, Burkina Faso and Cote d’Ivoire are also picking up. As the quality of the cotton from

this region is good, India usually imports around 10 lakh bales from West Africa annually. Though not major

cotton producing countries, Vietnam and Bangladesh are fast emerging as major cotton importing nations.

USDA estimates the cotton imports of Vietnam to hit a record high of 5.37 million bales in 2015-16. The strong

demand from the domestic textile industry is the major reason behind this surge in imports. It’s also said that

China is investing in Vietnamese textile industry in a great way. Though Vietnam used to import cotton mainly

from China, the unavailability of good quality cotton may attract it towards India. The cost of production of

textiles being low in both Vietnam and Bangladesh, the demand for raw cotton is sure to sustain in the coming

years also.











22

13 May, 2016th

Global Cotton Balance Sheet (In million 480-lb bales)

Cotton Yarn ScenarioOther major cotton producers are Brazil, Uzbekistan and Turkey. Brazil, the 5th largest cotton producer still

maintains its position as a major player in the industry. Being a Southern Hemisphere country, cotton planting

in Brazil occurs in Dec-Jan and harvesting in June-July. So the peak exports happen between the months of

August and December contrary to the US export season of May-July. This gives an indirect advantage to

Brazilian exports over US exports. Indonesia is the major export destination of Brazilian cotton. The

strengthening of Brazilian Real since 2004 reduced the cost of imported inputs and reduced the shipping costs

for Brazilian cotton exporters by increasing the availability of shipping containers. But the most important

factor which gave momentum to the Brazilian exports is the devaluation of Brazilian Real in January 2016. Over

the past few years, Uzbekistan, another major cotton producer is slowly losing its status as a major player in

the arena. Factors like food security issues, irrigation facilities, etc are behind this trend. China, Bangladesh,

South Korea, Russia and Indonesia are the major importers of Uzbek cotton. Cotton production in West African

countries like Benin, Mali, Burkina Faso and Cote d’Ivoire are also picking up. As the quality of the cotton from


this region is good, India usually imports around 10 lakh bales from West Africa annually. Though not major

cotton producing countries, Vietnam and Bangladesh are fast emerging as major cotton importing nations.

USDA estimates the cotton imports of Vietnam to hit a record high of 5.37 million bales in 2015-16. The strong

demand from the domestic textile industry is the major reason behind this surge in imports. It’s also said that

China is investing in Vietnamese textile industry in a great way. Though Vietnam used to import cotton mainly

from China, the unavailability of good quality cotton may attract it towards India. The cost of production of

textiles being low in both Vietnam and Bangladesh, the demand for raw cotton is sure to sustain in the coming

years also.

Source: - USDA; *Forecast

Global Cotton Balance Sheet

Particulars

Supply

Opening Stock

Production

Imports

Total Supply

Demand

Mill Consumption

Exports

Total Demand

Loss

Ending Stock

Stock to Use Ratio

2014-15

102.9

119.08

35.6

257.58

110.2

35.38

145.58

0.113

111.89

101.53

2015-16*

111.9

99.8

34.89

246.59

109.6

34.83

144.43

0.075

102.09

93.14

India holds a commanding position in the global yarn industry with a production of 4700 million kgs of spun

yarn this season. Out of this, cotton yarn accounts for about 70% which amounts to around 3400 million kgs.











23

13 May, 2016th


Domestic Cotton Yarn Production

If you look at the past few years’ data, it’s clearly visible that the cotton yarn production is on a rise year-on-year.

From 3582 million kgs in 2012-13, the cotton yarn production rose to 4054 million kgs in 2014-15! The

increasing demand for cotton yarn is the major factor behind this phenomenon. We expect the cotton yarn

production to continue this trend in the coming years also.

During the fiscal year 2014-15, the world imported around 1254 million kilograms of cotton yarn from India.

Though China continued to be our major market, its share in overall imports came down from 46% to 43.5%. In

the meanwhile, Bangladesh and Vietnam resorted for more imports from India which eased the situation little

bit. But demand from countries like South Korea, Portugal, Hong Kong and Colombia fell sharply. End of the day,

our overall cotton yarn imports came down from 1310.14 million kilograms in 2013-14 to 1253.37 million

kilograms in 2014-15, a decline of around 4.3%.

The major breakthrough in the global yarn scenario came as Vietnam entered into the picture as a major textile

manufacturer. The burgeoning textile industry of Vietnam not only made it a major raw cotton importer but a

major cotton yarn exporter also. The number of spindles rose 24% in the last 3 years reaching 6.3 million and is

expected to rise another 30% to reach 8.2 million by 2016-17! Strong demand for yarn from countries like

China is acting as a catalyst to the Vietnam’s growing spinning industry. It is forecasted that Vietnam’s yarn

exports will surge to 950,000 tonnes in 2015-16. But in the latter part of the season, we expect Vietnam’s yarn

exports to slowdown as China is reducing their yarn imports by encouraging the spinners to purchase cotton

domestically as a measure to reduce their cotton stockpile. Thailand is another country which is favouring yarn

imports rather than unspun cotton for use in its textile industry. But we expect this to be a temporary phenomenon and prices are expected to gain momentum in the coming










Source: Ministry of Textiles, NB Research, *Estimate

24

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

300.00

310.00

320.00

330.00

340.00

350.00

360.00

April May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. March

% C

hang

e

In M

illio

n Ki

logr

ams

2014-15 2015-16* %Change

13 May, 2016th


Price Scenario

Over the past few years, the domestic cotton yarn prices are on an increasing note. From Rs 120/Kg in 2008-09,

it rose to Rs 215/Kg in 2013-14! The increasing demand for yarn was the major reason behind this rally.

In 2014-15, the yarn price came down to Rs195/Kg owing to weakened demand in the market. This trend

continued in 2015-16 also as the yarn prices plummeted to new lows.

Source: CRISIL Research, *Average cotton yarn price (April –March)

Source: CRISIL Research











Cotton Yarn Price(40s count)

150

160

170

180

190

200

210

220

230

240

250

Jan-

13

Mar

-13

May

-13

Jul-1

3

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-1

4

Sep-

14

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep-

15

Nov

-15

Jan-

16

Rupe

es p

er K

ilogr

am

Domestic Price (40s count)

Domestic Cotton Yarn Price

50

70

90

110

130

150

170

190

210

230

250

Rupe

es p

er K

ilogr

am

Price*

25

13 May, 2016th


Source: ICE (Cotton No.2 Futures), Reuters











Cotton Price Outlook

International Markets

ICE Cotton

ICE Futures

ICE Cotton No 2 Futures was more or less volatile from the start of the global season beginning from August

2015. It touched 67cents/lb in August but couldn’t sustain that level and plummeted to the lows of 58 cents/lb

at the end of September.

The increasing global stockpile of cotton put the prices under pressure, trading in the range of 60-63 cents/lb,

throughout rest of the year. But the lower crop in India and Pakistan supported the price to certain extent.

USDA’s estimate of increase in cotton plantings coupled with China’s impending cotton reserve sale squeezed

the price to 57-58 cents/lb levels during the months of February and March. But the prices started to move

northward from the second week of April in line with the upbeat US weekly export data and concerns

regarding the weather in Texas. We expect the market to be volatile in the coming weeks because of the cotton

reserve sale of China. We forecast the prices to be in the range of 63-65 cents/lb till the last quarter of 2016.

But we will get a clear picture only after the completion of cotton plantings in USA as there are chances that

some acreage may shift to Soybean in some states because of the sudden surge in price for the latter.

55

57

59

61

63

65

67

69

03-Aug-15 03-Sep-15 03-Oct-15 03-Nov-15 03-Dec-15 03-Jan-16 03-Feb-16 03-Mar-16 03-Apr-16

US

cent

s/lb

26

13 May, 2016th












Cotlook A Index

ZCE Cotton

Though Cotlook A Index saw a surge at the inception of the new season, it fell to a low of 66 cents/lb within

the month of October owing to the concerns regarding the increase in global cotton inventory. But the index

recovered from that level by taking positive cue from the market mainly provided by the lower production in

India and Pakistan.

Source: Reuters

Cotlook A Index

Source: ZCE (ZCE Cotton No.1 contract), Reuters

ZCE Cotton

The index remained in the range of 68-70 cents/lb till the month of February. Then it gradually declined to the

levels of 65-66 cents/lb due to an array of factors like the positive US cotton planting report, China’s move to

go for another round of cotton reserve sale, etc. But we observed a sudden spike at the second week of April

mainly due to the upbeat US weekly export data. We expect the index to trade in the range of 69-72 cents/lb

till the last quarter of 2016.

ZCE Cotton No.1, the most active cotton contract in China, was highly volatile from the inception of the new

season.

10500

11000

11500

12000

12500

13000

Yuan

per

ton

Price

27

62

64

66

68

70

72

74

76

US

cent

s/lb

Price

13 May, 2016th












Domestic Market

MCX Cotton

As visible from the graph, the price stayed in the range of 12300-12100 Yuan/ton till the month of December.

The government tried to cut down its dependency on cotton imports and started encouraging the spinners to

procure cotton domestically in order to reduce their huge cotton stockpile. But under the WTO agreement,

China has to comply with the mandatory imports of about 53 lakh bales. This will only worsen the supply

scenario in China.

After the Lunar New Year, the prices gradually started showing a declining trend with Chinese cotton auctions

brewing in the backdrop. It was rumored that the government will quote a floor price less than the market

price as a move to offload the desired quantity of cotton. Not only the Chinese market but almost all the

international markets reacted negatively to this news. Along with ICE and Cotlook A Index, ZCE prices also

crashed with ZCE cotton trading near its all-time low in the month of March. But from March-end, the prices

started moving northwards as the yarn inventory got decreased and the operation rate of spinning mills

rebounded gradually. Most of the mills were squeezing their cotton stocks as the cotton auction was expected

to happen in early April. But as the auction got delayed and in the meanwhile yarn demand picked up which

forced the millers to refill their cotton stocks. But the prices surged almost 19% within 4 days and almost 41

million bales of cotton were traded in a single day! The main reason behind this sudden spike in price and

volume was attributed to the renewed buying interest and speculative tendencies which was prevalent in the

market. Not only Cotton but Steel, Iron ore and even Eggs were trading higher as investors pushed money into

the commodity market as in frenzy. The Zhengzhou Exchange reacted to this by increasing the trading charges

for cotton futures from 4.3 yuan to 6 yuan per lot. This price spike is just a temporary phenomenon and the

markets will correct as the speculation dies. The market will react more rationally in the coming months

depending upon the response to the cotton auctions. If China is able to offload a large chunk of their stockpile,

then we can expect the prices to dive globally at least for the short term. But in the long run, this can give

positive momentum to the prices as the global cotton inventory will diminish because of this. We expect the

prices to trade in a range of 11900-12200 Yuan/ton till the last quarter of 2016.

Historically, cotton market in India had seen many ups and downs with the market being buoyant most of the

time. We have seen even prices skyrocketing to Rs 61,000/candy (S-6 variety) in February/March 2011! Both

2012-13 and 2013-14 seasons witnessed a spike in the price owing to an array of domestic and international

factors like supply tightness in the US market, China’s government sponsored cotton procurement programme,

upbeat export demand for Indian cotton, depreciation of the Indian rupee, etc.

28

13 May, 2016th












Source: MCX, (MCX Cotton 29mm contract)

MCX Cotton

Source: MCX, Spot price – Rajkot (29mm), Futures – MCX Cotton 29mm

Spot Vs Futures

But in 2014-15, the entire scenario changed. We had a bumper production of 380 lakh bales which made the

total supply in the market around 444 lakh bales. This pressurized the prices to stay in the range of Rs

15,000-16,500 for most of the season. Around 76 lakh bales were carried forward to the next season.

Everyone expected a good crop in 2015-16 as there were no reports of reduction in acreage. But the ‘Whitefly

pest’ attack in the cotton growing regions of Northern India changed the whole picture. The news of a less crop

this season gave momentum to the prices. The arrivals in the major mandis also gradually thinned. Taking these

cues from the market, the price soared to the range of Rs 16000-16500 in Dec-Jan. But from the start of March

onwards, we saw a correction in the prices owing to the subdued demand in the spot market, USDA’s positive

projections about world cotton production in 2016/17 and the reports about China’s forthcoming cotton

auctions. The prices continued this trend and mostly stayed rangebound till March-end. We saw a

trend-reversal from April onwards as the prices started moving northwards and for the first time this season it

breached the Rs 17,000/bale mark.

15000

15500

16000

16500

17000

17500

01-Oct-15 01-Nov-15 01-Dec-15 01-Jan-16 01-Feb-16 01-Mar-16 01-Apr-16

Rupe

es p

er B

ale

Spot

MCX

13000

14000

15000

16000

17000

18000

19000

20000

21000

22000

23000

1-Oct 1-Nov 1-Dec 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep

Rupe

es p

er B

ale

2015-16 2014-15 2013-14 2012-13

29

13 May, 2016th











2016-17 Domestic Market Forecast


This rally was basically a reverberation of the sudden spike in prices which we witnessed in ICE, Cotlook index

and ZCE. Moreover, in India, the domestic demand also picked up, which, coupled with the thin arrivals gave

momentum to the prices. We expect the prices to ease a little bit on account of China’s cotton reserve sale in

the near-term.

As you all know the next crop season will be commencing on October. And this time the situation is a heady

cocktail of chaos, confusion and uncertainty. If we try to analyze the situation, we can find a multitude of

reasons which makes the coming crop season at times interesting and demanding. We will try to decipher the

state of affairs comprehensively.

Telangana, with 40 lakh acres under cotton cultivation, is a major cotton producing state of South India.

Moreover, the quality of the cotton from this region is commendable. Three consecutive years of failed

monsoon have brought in drought situation which drains the confidence of most of the farmers. In the wake

of this, Telangana CM K Chandrasekhara Rao has urged the farmers to shift to alternative crops such as Soybean

and Maize which will be more remunerative in the long run. It is expected that the government is planning to

restrict the cotton acreage to 15-20 lakh acres. But still more clarity is needed regarding the implementation of

this programme and its success rate. Anyway, if the situation turns like to be this, then we can expect at least

30-40% lower cotton output from this region, this season.

The sowing in Punjab and Haryana is around 75% over and will be completed by the end of this month. As the

bad experience of Whitefly pest attack is still haunting them, there are reports that this season, around 20-25%

area under cotton cultivation may shift towards other crops, mostly pulses like Arhar (Pigeonpea). The general

resentment against Bt Cotton which failed to resist the Whitefly pest forms the backdrop. So we may see a

shortfall in cotton production from this state in the coming season also. The situation is not entirely different

in Haryana too as we expect around 10-15% of erstwhile cotton area being shifted to cops like pulses and

vegetables. In the meanwhile, we expect the cotton acreage to be intact in Rajasthan in the coming season

also.

In the Central Zone, it is too early to forecast any shift in cotton acreage as the sowing hasn’t stated yet. In parts

of Maharashtra like Jalgaon and Jalna, where fields are irrigated, sowing will start around May 20th. Sowing

will start in other unirrigated areas after receiving the first showers maybe around June 1st week. Though there

are rumours that in Marathwada region, farmers may prefer Soyabean to Cotton, we are not expecting a huge

reduction in cotton acreage. Sowing will commence from the month of June in Gujarat also. Though there are

chances that some area under cotton cultivation may shift to groundnut this season, we believe that it will be

negligible.

In Karnataka, especially in the Northern Karnataka region, which is a major cotton growing tract, around

10-15% of area under cotton cultivation may shift towards pulses like Chana or Tur. In other cotton grown

areas like Mysore, Haveri, Davengere, Bellary, Raichur, etc. we are not expecting any reduction in cotton acreage.

According to our analysis, the ending stock of 2015-16 crop season will be around 34 lakh bales only. So if

the cotton production is poised to take a hit because of the aforementioned reasons, then we can predict the

market to witness a tight supply crunch in the coming season. This may lead to higher imports also. Our

imports may cross 30 lakh bales in the coming season.

Conforming to the WTO’s Nairobi Ministerial decision on elimination of export subsidies on cotton, India have

to adhere to it from January 1, 2017. The implication of this agreement has to be seen in a broader light as our

export demand has shown some improvements in the current season.

At the time of writing, China’s reserve sale which commenced on May 3 has garnered mostly positive

response from the buyers. They were able to sell off around 120,350 tons in the 4-day period. Out of that, 92,679

tons were imported cotton. Demand was more witnessed for imported cotton of Australian origin. However,

the domestic cotton sold was of low quality and were priced cheaper. Prices at the global markets, including

ICE and ZCE were under pressure due to this event. But whether the initial positive response what they got will

sustain longer is quite unlikely, given that the major stock which is left behind is of domestic cotton which

lacks in quality. Anyway, China’s cotton reserve sale is definitely going to create tremors in the global market in

the coming days also. But in the long-run, this move must be seen as a positive indication as the global cotton

inventory is diminishing because of this.

Above all, the most important factor which plays a crucial role or decisive in sowing decisions is nothing but

the Monsoon. IMD’s latest update predicted an ‘Above-Normal’ monsoon this year which may give positive

momentum for the cotton sowing at least in certain parts of the country. Even though it may be too premature

to comment on the overall cotton acreage at this point of time considering the positive prediction regarding

monsoon, we expect total cotton acreage to reduce by 20-25% because of the aforementioned factors.

30

13 May, 2016th












Telangana, with 40 lakh acres under cotton cultivation, is a major cotton producing state of South India.

Moreover, the quality of the cotton from this region is commendable. Three consecutive years of failed

monsoon have brought in drought situation which drains the confidence of most of the farmers. In the wake

of this, Telangana CM K Chandrasekhara Rao has urged the farmers to shift to alternative crops such as Soybean

and Maize which will be more remunerative in the long run. It is expected that the government is planning to

restrict the cotton acreage to 15-20 lakh acres. But still more clarity is needed regarding the implementation of

this programme and its success rate. Anyway, if the situation turns like to be this, then we can expect at least

30-40% lower cotton output from this region, this season.

The sowing in Punjab and Haryana is around 75% over and will be completed by the end of this month. As the

bad experience of Whitefly pest attack is still haunting them, there are reports that this season, around 20-25%

area under cotton cultivation may shift towards other crops, mostly pulses like Arhar (Pigeonpea). The general

resentment against Bt Cotton which failed to resist the Whitefly pest forms the backdrop. So we may see a

shortfall in cotton production from this state in the coming season also. The situation is not entirely different

in Haryana too as we expect around 10-15% of erstwhile cotton area being shifted to cops like pulses and

vegetables. In the meanwhile, we expect the cotton acreage to be intact in Rajasthan in the coming season

also.

In the Central Zone, it is too early to forecast any shift in cotton acreage as the sowing hasn’t stated yet. In parts

of Maharashtra like Jalgaon and Jalna, where fields are irrigated, sowing will start around May 20th. Sowing

will start in other unirrigated areas after receiving the first showers maybe around June 1st week. Though there

are rumours that in Marathwada region, farmers may prefer Soyabean to Cotton, we are not expecting a huge

reduction in cotton acreage. Sowing will commence from the month of June in Gujarat also. Though there are

chances that some area under cotton cultivation may shift to groundnut this season, we believe that it will be

negligible.

In Karnataka, especially in the Northern Karnataka region, which is a major cotton growing tract, around

10-15% of area under cotton cultivation may shift towards pulses like Chana or Tur. In other cotton grown

areas like Mysore, Haveri, Davengere, Bellary, Raichur, etc. we are not expecting any reduction in cotton acreage.

According to our analysis, the ending stock of 2015-16 crop season will be around 34 lakh bales only. So if

the cotton production is poised to take a hit because of the aforementioned reasons, then we can predict the

market to witness a tight supply crunch in the coming season. This may lead to higher imports also. Our

imports may cross 30 lakh bales in the coming season.

Conforming to the WTO’s Nairobi Ministerial decision on elimination of export subsidies on cotton, India have

to adhere to it from January 1, 2017. The implication of this agreement has to be seen in a broader light as our

export demand has shown some improvements in the current season.

At the time of writing, China’s reserve sale which commenced on May 3 has garnered mostly positive

response from the buyers. They were able to sell off around 120,350 tons in the 4-day period. Out of that, 92,679

tons were imported cotton. Demand was more witnessed for imported cotton of Australian origin. However,

the domestic cotton sold was of low quality and were priced cheaper. Prices at the global markets, including

ICE and ZCE were under pressure due to this event. But whether the initial positive response what they got will

sustain longer is quite unlikely, given that the major stock which is left behind is of domestic cotton which

lacks in quality. Anyway, China’s cotton reserve sale is definitely going to create tremors in the global market in

the coming days also. But in the long-run, this move must be seen as a positive indication as the global cotton

inventory is diminishing because of this.

Above all, the most important factor which plays a crucial role or decisive in sowing decisions is nothing but

the Monsoon. IMD’s latest update predicted an ‘Above-Normal’ monsoon this year which may give positive

momentum for the cotton sowing at least in certain parts of the country. Even though it may be too premature

to comment on the overall cotton acreage at this point of time considering the positive prediction regarding

monsoon, we expect total cotton acreage to reduce by 20-25% because of the aforementioned factors.

31

Price Forecast

Considering all the micro and macro factors, we expect cotton prices to be Long-term Bullish. But in the

short-term (June-July), cotton price on MCX will be under pressure due to sluggish export demand and

selective buying by millers. On the other hand, the thin arrivals and the lack of good quality cotton may cap any

major downside. We expect the prices to get support at Rs 16,300-16,500 levels. Further, we presume the

prices to move up from the month of August onwards and test Rs 18,000-18,500 levels; the upward trend is

expected to continue till the last quarter of 2016. From the month of December onwards, the supply will

improve as the harvest from the major regions hit the market. Though a slight downside can be anticipated, the

prices are supposed to get momentum and touch Rs 19,000-19,500 within the month of February 2017.

13 May, 2016th


32

13 May, 2016th

COMMODITY & CURRENCY RESEARCH TEAM

Name Designation E-mail

Kunal Shah Research Head [email protected]

Devidas Rajadhikary Sr. Research Analyst [email protected]

Harshal Mehta Sr. Research Analyst [email protected]

Mohammed Azeem Research Analyst [email protected]

Ravi D'souza Research Analyst [email protected]

Nikhil Murali Research Associate [email protected]

Anish G Research Associate [email protected]

Smit Bhayani Research Associate [email protected]

This Document has been prepared by N.B. Commodity Research (A Division of Nirmal Bang Commodities Pvt. Ltd). The information, analysis

and estimates contained herein are based on N.B. Commodities Research assessment and have been obtained from sources believed to be

reliable. This document is meant for the use of the intended recipient only. This document, at best, represents N.B. Commodities Research

responsible for the contents stated herein. N.B. Commodities Research expressly disclaims any and all liabilities that may arise from

company mentioned in this document.

Address: Nirmal Bang Commodities Pvt. Ltd., B2, 301 / 302, 3rd Floor, Marathon Innova, Opp. Peninsula Corporate Park, Ganpatrao Kadam

Marg, Lower Parel (W), Mumbai - 400 013, India

Disclaimer

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