Geojit's report on Agri Picks
The US Department of Agriculture has lowered its estimate for global cotton output for 2022-23 (Oct-Nov) to 116.4 mln bales (1 US bale = 218 kg) from 118.1 mln bales projected a month ago. The reason for the lowered estimate is attributed to the damaged crop from Pakistan due to floods, the department said in its World Agricultural Supply and Demand Estimates report for November. The report said that global cotton production for November is estimated to be down 1.6 mln bales from October. Further, global cotton consumption is seen at 115 mln bales in November as against 115.6 mln bales a month ago. The consumption is seen lower due to a decline in mill use in Pakistan and Bangladesh, the report said. For November, global cotton exports are estimated at 43.2 mln bales, marginally down from 43.6 mln bales the previous month. The decline is due to lesser projected exports from West Africa along with import reductions from Bangladesh and China, hampering trade worldwide. The agency has also lowered its 2022-23 global ending stocks estimate to 87.2 mln bales from 88 mln bales last month. For India, the agency has maintained its November production estimate of 27.5 mln bales. The consumption estimate for the country is seen at 24.0 mln bales, steady from last month. For 2022-23, cotton ending stocks in India are now seen at 10.3 mln bales, higher than the 10.2 mln bales projected a month ago, the report said. Cotton ending stocks in India for 2022-23 are now seen at 10.2 mln bales, higher than 8.9 mln bales projected a month ago, the report said.The farm ministry today pegged the country's kharif foodgrain output in 2022-23 (Jul-Jun) at 149.9 mln tn, according to the first advance estimates released today. Cotton output in 2022-23 is pegged at 34.2 mln bales, as against 36.2 mln bales in 2021-22. But in its fourth advance estimate for 2021-22, the government had lowered its cotton output view to around 31.2 mln bales. The area under cotton across India in 2022-23 (Jul-Jun) season was over 12.7 mln ha as of Thursday, up 7.5% from a year ago, data from the farm ministry showed. Sowing has been completed in northern states and acreage in Haryana, the top producer in the region, fell 5.4% on year to 650,473 ha. In Punjab, it fell 2.4% to 248,000 ha. Inadequate power supply for irrigationand non-availability of canal water during the initial sowing stage led to a drop in acreage in the northern states, experts said. In Gujarat, acreage rose to 2.5 mln ha as against 2.2 mln ha a year ago. In Maharashtra, the area under the crop increased 7.3% on year to 4.2 mln ha, while in Telangana, it fell 2.2% to 2.01 mln ha. Gujarat is the top producer of cotton in India, followed by Maharashtra and Telangana. Together, Gujarat and Maharashtra account for 50-55% of the country's total production. According to a circular from MCX, the exchange is in process of modifying the Cotton contract specification. Accordingly, with effect from August 29, 2022, no fresh positions will be permitted in Cotton January 2023 expiry contract which has currently nil open interest. Cotton February 2023 expiry and subsequent expiry contracts will temporarily not be launched for trading till such time the revised contract specification is finalized. No changes for other running Cotton contracts with Open Interest.
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