MINUTES OF THE EXECUTIVE COMMITTEE MEETING NO: 12 /2012-15 OF THE COIMBATORE COTTON ASSOCIATION HELD ON 5TH AUGUST 2013, MONDAY AT HOTEL SREE ANNAPOORNA HOTEL - GANGA HALL:
- Vice President G.U. Rathakrishna established the Quorum
- Prayer by: Sachin S. Kotecha
- Meeting was called to order: by Vice President G.U. Rathakrishna
- Vice President G.U. Rathakrishna delivered the Welcome Address:
- Leave of absence was informed of the following members:
- Minutes of Previous Meeting were read out by Secretary Sachin S. Kotecha & it was subsequently Approved by Hiren A. Daga / Shekhar Raja:
- Induction of new members: (None)
- Discussion on current situation in Cotton Trade and its future prospects:
Everybody expects that the market will comes down where as We find prices of all commodities like rice and even water has doubled. Ginners are saying the crop could be damaged due to rain but Mr.shekar who is from agriculture background assures that as the first two months which are crucial for the cotton plant rains have been favourable and the plants are healthy so We are bound to get good quality and good yield in the upcoming season. Haryana has had an increase in cotton acreage this season. Andhra farmers will avoid chilly cultivation this year and shift to cotton cultivation as 60%of last years chilly crop is still in stock with them. USDA has predicted the Indian cotton crop size to be 3 crore and 77 lakh bales in the upcoming cotton season. The problem is our foreign exchange where India may lose out in the upcoming cotton season. Most mills have shifted to export of yarn and therefore there won't be much of fluctuation in the upcoming cotton season as cotton people are not in trouble like in the previous years. North mills have enjoyed the benifit of the market this season due to good power position. South mills are comfortable in power now but there is not much of cotton stocks. Cotton prices won't go below Rs.40,000/- spot per candy in the upcoming cotton season.
After this month there is only 30 lakh bales unsold stock left in the market including CCI stocks. We have to be very careful and take our payment out before that as there will be no stocks for consumption. Till all India daily kappas arrivals touch 90,000 bales We cannot feed our textile mills comfortably. Mills have been making money till now and will be in future also. Next is power problem. Some people are saying that our chief minister has made a pact with piramal power for a period of 15years at a cost of 4.70/- per unit. We hope the report is true as after the month of September the wind power production will drop. Now all textile mills have doubled their production.
The cotton crop in the upcoming cotton season will be approximately 3 crore 75 lakh bales. Prices of cotton from range from Rs.36,000/- Spot per candy to Rs 45,000/- spot per candy. Gujarat crop could cross 1crore 20 lakh bales and Tamilnadu crop could cross 9 lakh bales. Andhra needs more time to assess as it tends to have damages every year due to cyclone and we must wait for the coming months to make a correct assessment. Yarn export will increase in the coming season instead of cloth. Mills could get benefits upto 9% due to exports even though it may not be directly. Government is going to create a yarn bank to help the mills get key loans at lower interest rates. Indian rupee will stabilize at Rs.55/- in due course of time.
Right now we have 32 lakh bales. Mills have average stocks of 45 days where as they should cover upto Nov 10th as before that the market will not drop. We will be left with a carry forward stock of 9 lakh bales after consuming the 63 lakh bales in the market at present and this includes the mill stocks. Import of cotton is ruled out due to the fall in value of the ruppee to the dollar. US is forward sold for 2 million bales of which 40% is by Chinese mills and rest is with mills of various other countries. Right now at 93 cents per lbs the mills feel it is not viable to import. They lost the bus at 80 cents per lbs. Most of the mills especially from Andhra Pradesh have shifted to coarser counts. Yarn exports will double in the coming time. Off late there has been a lot of sale in export of yarn. Tamilnadu mills are losing out to their counterparts from Andhra Pradesh due to under pricing by them. Even North mills are costlier by 5% compared to Andhra Pradesh mills and are losing out to Andhra Pradesh mills as they are under spinning. The real shortage of cotton will be felt in September as planting of cotton has been completed by June 15th the cotton arrivals will peak this time in October. This year Telangana cotton area is going to be really big due to increase in the cotton sowing area here. Of the 106 lakh sables registered with DGFT till now 94 lakh sables have been shipped of which 63 lakh bales have been shipped to China.
In the current season cotton crop of Tamilnadu is 6 lakh bales and this could rise to 9 lakh bales in the upcoming cotton season.
The crop in Karnataka could cross 20 lakh bales in the coming season and a lot of new factories are coming up at Raichur.
The Madhya Padesh crop could be approximately 25 lakh bales this season has cotton sowing has increased.
8) Mr.Karan Raheja:
Good demand for Dch-32 in export. Cotton exports could be above 1 crore this season and in the next season approximately 85 to 90 lakh bales will definitely be shipped despite China's textile policy.
Yarn enquiries for the past. 15 days is reasonable. After one week that is after Ramzan yarn enquiries will improve.40's yarn is at Rs.205/- today. Finer counts 60's and above is much better compared to 40's. In 64's flow is a little slow. Probably after Ramzan payments will improve. Like mills, the looms are also not holding stock.
Windmills are shutdown for 8 to 12 hours per day. This practice will continue till synchronization work with the National grid is completed by L&T. This could take a couple of years after which Tamilnadu can export and import power. Import of 10 lakh bales that is ex Malaysia business has not come. Mills will ask for deliveries before Sep 15 th. Manufacturing textiles in USA is getting cheaper due to lot of subsidies given by their government like Loan repayments of 20 years and tax breaks for 10 years. Also free land for industries. Labour is approximately 25,000/- dollars per year. Power is less by Rs.1 per unit. Initial investment is only 15% to put an industry. For the coming season the benchmark will be Rs.41,500/- spot per candy. Prices of exports at 85 cents per lbs.
11. Concluding address by Secretary, Sachin Kotecha:
Concluding address by Secretary, Sachin Kotecha:
- Mr. Suresh Sutalia - Rs.46,000/- spot per candy. (Winner)
- Mr. Harikishandas - Rs.45,500/- Spot per candy.
- Mr. Nayan Nagda - Rs.45,000/- to Rs.46,000/- spot per candy (Winner)
(Lastly, the meeting was adjourned and followed by Dinner which was hosted by Mr. Rajkumar of Annur)
(G. U. Rathakrishna)
(SACHIN S. KOTECHA)