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PRESENTATION
ON
T T Limited
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0
5
10
15
20
25
30
2001-2 2002-3 2003-4 2004-5 2005-6 2006-7
PRODN
IMPORTS
EXPORTS
Indian Cotton story
Figures are in
mln bales
Of 170 kgs each
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Today we shall discuss
About the Indian crop
Varieties of Indian Raw Cotton
Specifications of various types Pros and cons of Indian types
Relevant issues pertaining to trade withBangladesh
Indian cotton market today
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About the Indian crop
3rd year in running, bumper crop expected 27.00 millionbales of 170kg (10% more than last season)
Both area and productivity has grown
Estimates for 2012 is between 39.0 to 45.0 mln bales
Quality is better due to use of better quality and BT seeds
Trash levels/contamination is relatively lower due tobetter ginning practise and BT seeds
Average length of cotton fibre is growing due to BT seeds
hence shortage of short length fibre All cotton is double roller gin except J 34
J 34 (27mm), Shankar 6 (28mm+) and MCU 5 (30mm+)are the popular varieties
Lustre, dye absorption and neps is amongst the best in the
world
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Current Balance Sheet is
Carry forward stock has come down, leading to
pressure on prices
(in million bales of 170 kgeach)
2005-2006 2006 2007
SUPPLY
Opening Stock 7.20 5.60
Crop 24.60 27.00Imports 32.20 33.10
DEMAND 21.70 24.00
Consumption 4.70 4.80
Exports 26.40 28.80
5.60 4.40
CARRY OVER
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STATES 2006-07 2005-06AREA PRODN YIELD AREA PRODN YIELD
PUNJAB 5.88 2.60 752 5.57 2.00 610HARYANA 5.33 1.70 542 5.83 1.30 379
RAJASTHAN 3.50 0.80 389 4.71 1.10 397GUJARAT 23.90 9.30 662 19.06 8.90 794
MAHARASHTRA 31.24 5.20 283 28.75 3.60 213M. P. 6.30 1.80 486 6.20 1.80 494 A. P. 9.62 3.20 565 10.33 3.20 527
TAMIL NADU 1.33 0.50 639 1.40 0.55 668
KARNATAKA 3.70 0.60 276 4.13 0.65 268OTHERS 0.78 0.10 218 0.79 0.10 215
LOOSE LINT 1.20 1.20TOTAL 91.58 27.00 501 86.77 24.40 478
and regionwise break up is
NOTE: AREA IS IN HECTARES/PRODUCTION IN MILLION BALES OF 170 KGS/YIELD IS INKGS/HECTARE
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India has wide range of cotton
Shankar 6 Bunny MCU 5 DCH 32
LRA Mech 1 H4 J 34 V 797 Etc etc
caters to need of yarn from 4/1 to 120/1
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and their basic specs are
Type Length(mm) Mic Strength(gpt)
Trash (%)
S 6 27.5 29.0 3.5 4.9 28- 30 2 - 3
MCU 5 30.0 32.0 3.5 4.9 29 32 2 - 3
DCH 32 34.0 36.0 2.8 3.8 31 33 2 - 3
Mech 1 28.0 29.0 3.5 4.9 27 28 3 - 4
Bunny 29.5 31.0 3.5 4.9 28 29 2.5 3.5
H 4 27.0 28.0 3.5 4.9 26 27 3 - 4
J 34 25.5 28.0 4.0 5.0 25.5 27 4 - 5
LRA 25.0 27.0 3.5 4.9 25 27 3.5 4.5
Y1 24.5 25.5 4.0 5.2 24 26 4 - 5
V 797 23.0 24.0 4.5 6.0 20- 22 12- 15
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Why Indian cotton ?
Type Pros Cons
S 6 Excellent grade, absorption, lustreand strength
Contamination
MCU 5 Good staple length, lustre,absorption and strength
Contamination
DCH 32 Staple length, strength Low micronaire, relatively highertrash
Mech 1 Cheaper than S- 6 Marginally low on all parametersagst S-6
J 34 Good dye absorption, highmic/maturity
High Trash
H 4 Price lowest in its length peers Low uniformity/grade
Bunny Price lowest in its length peers Grade lower than MCU 5
LRA Trash lower than J-34 Mic variance high, grade lowerthan J 34
V 797Inspite of high trash, final yarn
good as it falls out & good lustreHigh trash
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Relevant issues for Bangladesh
High incidence of freight 1 to 2 cents/lbs extra cost agstFar East countries
Availability of a standard recognised laboratory to settledisputes amicably
Lack of proper weightment facilities in Chittagong andmany factories sites
Popular misconceptions of Indian cotton Shankar 6 ? only in Gujarat MCU 5 ? only in A.P/Tamil Nadu/Orissa
Another misconception Indian cotton not good forknitting yarn: all Indian mills making knitted yarn fromthis cotton
Mic values/strength/nep levels are very good in S 6 comparable with any origin
Indian shippers have no system of hedging/buyingforward, hence difficult for them to sell forward better tobuy prompt
Correlation with NY Futures is low
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Indias cotton market today
Arrivals have dropped to about 27000 bales per day agst40000 bales last year same time
Total arrivals for the season have crossed 24.5 mln balesagst 21.0 mln bales last yr
Ginners are holding good quality stock in anticipation ofprice increase as ending stocks are expected to be lowerthan last yr
Spot prices have softened a bit due to poor yarn mkt andrupee appreciation
Import contracts of over 125,000 bales of medium staplecotton have been contracted in last one mth
Low staple cotton availability is very low
Expected fall in acreage in Gujarat in 2007-08(origin ofShankar 6) expected, as cotton may be replaced bysugarcane etc
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