CORE PURPOSE AND MISSION: To assist cotton farmers in improving yield & quality, helping cotton users locate regular sources of quality cotton at nominal prices and to prevent the arbitrary use of paper and plastic objects where cotton can easily be replaced as a ‘renewable resource’ (e.g. cotton handkerchief vs. tissue paper, cotton bags vs. plastic/paper bags), thereby saving the environment.

=====================================================================

Date: 24/12/2016

Quote: “Your life does not get better by chance. It gets better by change."

-Jim Rohn

India New Season Arrivals: (As on 20-12-2016)

State wise

Arrivals

Just Agri 2015-16

(Lakh bales)

Just Agri 2016-17

(Lakh bales)

CCI 2016-17

(Lakh bales)

Punjab 2.600 3.480 4.885

Haryana 4.500 6.470 7.250

Rajasthan 5.200 3.700 6.967

Gujarat 18.200 17.950 16.960

Maharashtra 19.100 20.570 18.110

M. P. 6.600 6.670 6.950

Telangana 18.100 6.200 5.939

A. P. 3.400 3.00 4.250

Karnataka 3.300 3.560 3.035

Orissa 1.100 0.230 0.197

Other 0.100 0.200 0.205

Total 82.200 72.030 74.748

Domestic Market Summary:

Gujarat S6 price chart 15th Oct to 23rdDec 2016

Probable reasons for Indian cotton prices to sustain:

1) Staggered arrivals by Indian cotton farmer in the coming days.

2) Consistent demand from mills and exporters at current market prices.

3) Strong USD against INR.

Probable reasons for Indian cotton prices to fall:

1) Increase in daily arrivals over 0.2 million bales for atleast a month.

2) Fall in demand from mills following weak yarn and fabric market.

3) Less aggressive buying from exporters following a low demand and weak

USD against INR.

Considering all practical aspects, the Indian cotton prices are not expected to fall

extensively but will remain range bound in the short term.

Demonetisation: Effects and after effects

The whole textile chain has been adversely affected due to the recent

demonetisation. Cotton arrivals have decreased as the farmer insisted on the

prevailing system of payment in cash. Arrivals have slowly picked up since last

week as farmers in many cotton centres are slowly accepting cheque payments but

there is a possibility that arrivals will remain staggered. Although it is peak season,

majority of ginners are working under capacity due to disparity and limited arrivals.

3600036500370003750038000385003900039500400004050041000415004200042500

15-Oct-16 25-Oct-16 4-Nov-16 14-Nov-16 24-Nov-16 4-Dec-16 14-Dec-16 24-Dec-16

Shankar - 6 (in INR)

Spinning mills find it utmost difficult to sell yarn in the domestic market as weavers

are unwilling to build inventories. This is because a lot of their orders have got

cancelled from the fabric processors after demonetisation. Dyeing plants have

started to partially shut down as labour payments are becoming an issue .Most of the

labour payment in the textile industry was in cash. A lot of unemployment has been

observed because of lay-off by the textile industry or voluntary migration of the

labour to their home states. Garments manufacturers catering to domestic markets

unable to sell in cash as customers do not have cash in hand. Only export based

units are operating regularly but the competition is getting tougher, and margins

smaller.

Situation looks worrisome at the moment in the short and mid-term, although we all

know that demonetisation will be beneficial in the long term. Some of the Mill

Associations have asked for enhancement of working capital limit, reduction of

interest rates on bank loans, and MEIS to cotton yarn exports to combat the current

crisis.

It will take a tremendous joint effort from the Govt. and the Textile industry to come

to adopt the cashless system of payment and increase consumption and demand.

Based on the famous inspirational Hindi film, “Chak de India”, COTTONGURUTM

suggests a new mantra for the Textile Industry,

“Cheque de India (Payment by cheque only)”.

International Market Summary:

World production for 2016 is projected to be almost 103 million bales, which is 6.0

million bales more than last year. The United States is responsible for the largest

production increase, at 3.0 million bales higher than last year. Australian

production is projected to be 1.0 million bales higher than in 2015. Pakistan’s crop

is expected to be 1.25 million bales higher in 2016. Production in Brazil is expected

to increase by 600,000 bales in 2016, while Turkey is projected to increase

production by 550,000 bales. India’s crop is expected to be 100,000 bales more

than last year, while China’s production is estimated to decline by 1.0 million

bales.

World consumption is expected to exceed production in 2016, for the 2nd

consecutive year. USDA is projecting a slight increase of less than 1% in world mill

use to 112 million bales for 2016 due to increased consumption in China,

Bangladesh, Vietnam and Turkey. U.S. textile mills are expected to consume 3.5

million bales, 50,000 bales more than in 2015.

China: China’s policies will continue to influence the world cotton market. China continues

to hold almost 50 million bales in reserves although the recent auctions led to a

significant reduction of almost 12 million bales.

According to the National Bureau of Statistics (NBS), China's cotton production will

fall by 260,000 tons to 5.34 million tons (- 4.6%). The area under cotton fell by

420,500 hectares to 3.376 million hectares (-11%). It is the 3rd consecutive year of

decline, mainly due to decrease in Govt subsidies and relatively low profitability in

cotton farming.

Chinese futures are falling currently maybe due to some North China cotton mills in

Hubei and Shandong provinces halting production to fight smog. Smog alerts are

becoming increasingly common in China.

Xingjian cotton is reported to have quality issues to produce 32s & 40s cotton yarn.

Also prices of Chinese domestic cotton are very high compared to yarn. China mill

buyers wish to import more cotton because of better quality and cheaper price. An

expansion in China’s textile industry especially in Xinjiang (where Spinning

Capacity will amount to around 15 million spindles), coupled with lower cotton

production and reserves, should lead to an increase in demand for imported cotton

in the next few years.

Brazil: According to data from Brazilian Stock Exchange of Goods (BBM) tabulated by

Cepea, 23% of the 2016-17 Brazilian crop, estimated at 1.4 million tons, had

been traded until late November (25%in the domestic market and 75%

in the international market).

US:

In its December report, the USDA has projected US cotton production for 2016 at 16.5

million bales, an increase of 24% above last year. However, the planted area (10.2

million acres) and harvested area (9.7 million acres)remain the same.

The 2016 US cotton yield is estimated at 821 pounds per harvested acre (+7%),

driven by improved conditions, particularly in the Southwest regions.

Upland cotton production in 2016 is projected to be 16 million bales, as against 12.5

million bales in 2015, while the extra-long staple (Pima) crop is forecast at 562,000

bales, which is also considerably above the 2015 ELS cotton crop.

Pakistan: The government remains unable to announce the textile package to bring the

industry out of crisis and to solve the issue of disparity of gas and electricity prices

between Punjab and other provinces. Like India, some Pakistani spinners may

scale down production in 2017. Spinning mills are under losses with high cotton

price and lower export price, and some of them plan to curtail production by at

least 30% in 2017.

Fearing price crisis in the textile industry, the Cotton Crop Assessment Committee

(CCAC) may not further revise cotton production estimates downward and would

maintain it at 11.039 million bales for the current season (2016-17).The body has

already revised the cotton production estimates downward twice in the current

season against the initial estimates of 14.1 million bales.

W.Africa: As per USDA forecast, West Africa’s cotton crop is expected to increase by 19% in

the 2016-17 season from 1.6 million Mt to 1.9 million Mt. The main countries that

will contribute to this increase are Burkina Faso, Mali, Cote d’Ivoire and Chad.

Conferences/Seminars: COTTONGURUTM was invited was a Speaker / COTTONGURUTM Media was the

official Media Partner for these Conferences.

ITMF: 2016

World textile industry leaders converge in Jaipur

The Confederation of Indian Textile Industry hosted the annual conference of the

International Textile Manufacturers Federation (ITMF) from 17 to 19 November

2016, at Hotel Marriott, Jaipur, Rajasthan. The conference saw participation of over

370 delegates from across the world that included manufacturers, traders,

retailers, economists, government officials and policy analysts.

Addressing the conference, Textile Minister Hon. Smt. Smriti Irani said that India

had big potential to attract investors and global buyers in this sector as it had a

five-thousand-year-old tradition in this sustainable, efficient and transparent

industry. She assured the industry that the government was keen in providing

smooth and hassle free business environment. Smt. Irani stressed the huge scope

for growth of technical textiles in India, and called on the industry to approach the

government with suggestions. She also asked the industry to invest more on R&D.

Smt. Rashmi Verma, Textile Secretary in her keynote address, said that the industry

needed more technological advancements, and appealed to the investors and

entrepreneurs to enhance investment and modernisation to increase productivity,

sustainability, and quality in India’s textile goods.

Mr. Tiang Wuan, ITMF President made the opening address to the conference, the

theme of which was “Global Textile Economy in the New Normal”. Mr. Naishadh

Parikh, Chairman CITI welcomed all the delegates to the conference.

Plenary sessions were held on textile value chain management, sustainability,

transparency of businesses, cotton vs. other fibres, technical textile and nonwoven,

retail and e-commerce, where experts gave thought-provoking presentations.

The deliberations at the conference saw the delegates accepting the challenges of

the new global economic dynamics to sustain the business by adopting best and

innovative business practices.

In the backdrop of changing global textile trade and business landscape, India is

looked upon as a preferred sourcing and investment destination by western

developed markets and emerging industrial economies for textile goods.

The Confederation of Indian Textile Industry represents all the sub sectors of the

$100 billion Indian textiles sector that covered the entire textile value chain

through its Member Associations, Associate Members and Corporate members

AGRO VISION: 2016 (Development of Cotton Hubs & Textile Parks in Vidarbha) 8th Agrovision in Nagpur received enthusiastic response from farmers,Agri

Experts, Industry and organisations

8th Agrovision - Highlights:

* The Biggest Agriculture Summit of Central India

* Lakhs of farmers visited the event

* Over 400 exhibitors participated

* Over 30 Thousand farmers’ attended the workshops

* 31 comprehensive workshops

* Most significant conference on “Make in Vidarbha”attended by the Textile

Commissioner, International dress designer Ms Ritu Beri and many other

dignitaries. The conference was conceptualised by Dr. Hemant Sonare, Hon.

Secretary, Textile Association of India-Vidarbha, Nagpur.

Upcoming Conferences:

COTTONGURUTM is invited as a Speaker in the following Conferences.

COTTONGURUTM Media is the official Media Partner for these Conferences.

1) Bangladesh

GLOBAL COTTON SUMMIT BANGLADESH – 2017, JANUARY 27-28th, 2017,

Dhaka, Bangladesh

The “Global Cotton Summit 2017” which is organized by Bangladesh Cotton

Association (BAC) in association with Bangladesh Textile Mills Association will

showcase the best practices of Bangladesh cotton industry which has resulted in

becoming the largest cotton importer in the world. We are projecting an import of

7.7 million bell by the year 2021. In order to get maximum benefit and output from

the cotton industry, this global summit will invite industry experts from all over the

world to participate in Open Floor Discussions, Business Sessions, Business

Matchmaking with global partners and showcase the progress Bangladesh have

made in the cotton industry. This summit will focus on crafting partnership

opportunities between Bangladesh and the spinners, traders, agents, growers,

ginners, controllers, the International associations, intention to get together all

cotton people who are actually engaged in the Cotton Industry.

This year the summit will be held on 27th and 28th January, 2017 at Hotel Radisson

Blu with your valuable and irreplaceable experience and contribution to the cotton

industry. We believe your participation during the summit will be hugely beneficial

to the event as well as the progress of Bangladesh Cotton Industry.

For registration inquiry: Mr. Mehdi Ali (Gen. Secretary – Bangladesh Cotton

Association) +88029335731

Mr. Rajendra Karpe (Team COTTONGURUTM) +91 7208011249

2) Bhopal

For registration inquiry: Mr. Ashok Veda (Hon. Secretary) +91 9826047355

Mr. Rajendra Karpe (Team COTTONGURUTM) +91 7208011249

3) Gandhinagar

COTTONGURUTM Media is the official Media Partner for this Conference.

Something Different:

COTTONGURUTM CSR Management Services:

Pursuant to the Green Initiative in Corporate Governance issued by the Ministry of

Corporate Affairs, we invite you to utilise your CSR obligation such that it serves the

Society, protects the environment, enhances your Social/equity image and

strengthens your Supply value chain.

Call : +91 22 25679871/72

Mail : info@cottonguru.org.

Workshop on Sustainability of Cotton Supply Chain:

A concrete step towards “Make In India”

How to make profit in Raw Cotton Ginning

A very significant ginner workshop was

arranged by M/s Laxmi Cotspin Ltd.,

Jalna, (Maharashtra, India) with

COTTONGURUTM on 27th October,

2016 on the above topic. The main

objective of this workshop was to

strengthen the supply chain of ginners

and spinners.

.

During the workshop, COTTONGURUTM

gave a PowerPoint Presentation (PPT)

on the current situation of ginners and

discussed about their problems. A

majority of ginners do not have direct

access to both farmers and buyers.

They are disconnected with their

supply chain. COTTONGURUTM

explained the need to locate and

identify genuine buyers by system of

Know Your Customer (KYC).

Mr.Manish Daga shared the core purpose and vision of COTTONGURUTM. He invited

both buyers and sellers to promote the use of cotton as it is an eco- friendly natural

fibre so as to address the environmental cause and ensure sustainability for the

entire cotton textile supply chain.

COTTONGURUTM has full faith that such concrete effort by genuine Spinning Mills

will pave the path for more such workshops to strengthen the supply chain and

realize our Hon. Prime Minister Mr. Narendra Modi’s dream of “Make in

India”.

Reports: ICAC:

The International Cotton Advisory Committee lifted its forecast for world cotton

prices, as raised its estimate of the world cotton production deficit this season.

The ICAC saw cotton consumption outstripping supply by 1.72m tonnes (over10

Lakh Bales of 170 Kg each)over 2016-17, compared to the 1.20m tons forecast last

month.

Cotton consumption: 24.20 (+0.45) million tons

China: 435 Lakh Bales

India: 306 Lakh Bales

Pakistan: 135 Lakh Bales

Cotton production: 22.48 (+0.08) million tons

India: 341 Lakh Bales

China: 270 Lakh Bales

United States: 206 Lakh Bales

Pakistan: 112 Lakh Bales

Ending stocks: 17.4 (-9%) million tons

ICAC said that due to the delay in Indian cotton reaching the global market, other

countries may benefit from increased exports in the short term.But the current boost

in prices from currency disruption in India would ease, as new notes

circulated.Indian cotton exports are expected to fall by 34% to 825,000 tons (49 Lakh

Balesof 170 kg) in 2016-17.

Top consumer Bangladesh, which is expected to grow imports by 1% to 1.4 million

tons (about 84 Lakh Bales of 170 Kg each)this season, may need to turn to countries

other than India to meet its needs.But exports from Australia, Burkina Faso and Mali

are expected to grow rapidly.

The ICAC forecast prices on the Cotlook A index to average 75 cents a pound in

2015, one cent up from its previous forecast.

USDA:

CAI:

Wasde Report: COTTON: This month’s 2016/17 U.S. cotton forecasts include increased production,

lower domestic mill use, and higher exports and ending stocks. Production is raised

362,000 bales to 16.5 million due to an increase for Texas, which is partially offset by

decreases for the Carolinas. Domestic mill use is reduced 200,000 bales as recent

activity indicates a slowdown in pace compared to the year-ago level. The export

projection is raised 200,000 bales on higher production. Ending stocks are now

projected at 4.8 million bales or 31 percent of disappearance. The forecast range of

64 to 70 cents per pound for the marketing year average price received by

producers is narrowed one cent on each end.

The global 2016/17 forecasts likewise show higher production and increased ending

stocks compared with last month. Production is raised for Australia, the United

States, and others. Consumption is reduced for India, the United States, and South

Korea, and raised for China and Vietnam. World trade is revised marginally. World

ending stocks are raised 842,000 bales to 89.1 million.

Government Reports:

The Indian cabinet has approved a time-bound package of INR. 6006 crore to boost

employment and exports of made-ups.It included enhanced support under the

Technology Upgradation Fund scheme (TUFS), extension of the PMPRPY scheme,

and rebate of State levies for units into production of made-ups.The textile industry

has welcomed the announcements for the garment segment.

COTTONGURUTM Comments: Although world consumption has expanded for the past 5 years and has overtaken

consumption for the 2nd consecutive year, cotton demand continues to struggle due

to increased competition from lower priced man-made fibres. It is high time that

the cotton textile industry gets together and implements innovative means of

promoting cotton such as functional blends with man-made fibres for

technical textiles, apparels, etc.

Team COTTONGURUTM sincerely follows its mission of promoting cotton as the

most breathable and adaptable eco-friendly natural fibre at every national and

international platform.

Technical Reports :

1) ICE Cotton:

ICE Cotton is trading weakish in short term, below its short term moving averages.

However supports expected around 70 areas. Strength in ICE Futures expected only

above 72.50. Long Term Trend is intact above 65 zones. All dips for short to medium

would be opportunity to go long. Cotton likely to make higher highs in months to

come.

Key Supports 70.00-67.80-66.47-65.22, Key Resistances 72.50-73.85-74.50-77.80.

2) MCX Cotton:

MCX Cotton trading volatile and sideways with weakish bias in immediate short

term. 18200 key support, below which downside momentum can pick up. Strength

expected only above 19600 areas. Traders are advised to remain on sidelines and

trade long only above 19600 or short only below 18200.

Key Supports 18650-18200-17970-17450, Key Resistances 19200-19600-19800-20060.

Top Interviews: Exclusive Interview with Dr. Kavita Gupta, IAS, Textile

Commissioner of India.

https://www.youtube.com/watch?v=rz6BS_g9Msk

Exclusive Interview with Mr. B. K. Mishra, Ex.CMD, CCI

https://www.youtube.com/watch?v=_FUcljJnbFY

Exclusive interview with thought leader Mr. Suresh Kotak,

Chairman of Kotak & Co.

https://www.youtube.com/watch?v=GBJL-gfzLRc

COTTONGURU™ Fortnightly Newsletter is a cotton market analysis newsletter with a global

outlook committed to authenticated and sustainable content. It revolves around cotton and

textile industry as a concept in terms of trade, research and knowledge. The newsletter is

circulated to over 10,000 Textile companies, Textile & Research Associations, professionals,

Government Offices worldwide.

About the author: Mr. Manish Daga popularly referred by the cotton industry as COTTON

GURU™ is a qualified textile technologist.

He is India’s only Cotton Valuer registered by the Indian Institution of Valuers, India. He is the

fourth generation in cotton trade, advisory and broking services from his family. The P. R. D.

Cottons Group is 113 year old in cotton business uninterrupted.

Call or mail for any information, suggestion, feedback or to know how your Company can

benefit from the knowledge and experience of COTTON GURU™.

Call on +91 9820072705 or mail to manish@cottonguru.org

Disclaimer: For private circulation to the addressees only and not for re-circulation. Any form of

reproduction, dissemination, copying, disclosure, modification, distribution and/or publication

of this Newsletter is strictly prohibited. The contents of this Newsletter aresolely meant to

inform and is not a substitute for professional advice.

FIRST AND ONLY REGISTERED“COTTON VALUER” IN INDIA

MEMBERSHIP

1. FIEO (Federation of Import & Export Organization)

2. CAI (Cotton Association of India)

3. MSME (Maharashtra Small & Medium Entrepreneurs)

4. ISCI (Indian Society for Cotton improvement)

5. IFS ( Indian Fibre Society)

6. TAI (Textile Association of India)

COTTONGURU™

Mr. Manish Daga