India hoarding cotton makes cotton prices find support

Indian farmers hoarded cotton, causing buyers to repurchase US cotton, alleviating concerns that the cotton may continue to fall, after the cotton price plummeted by 10% in November.

Senior analyst Mike Stevens said that US cotton demand began to rebound last week, and traditional buyers returned to the US cotton market such as Indonesia, Mexico, Taiwan and Turkey, and last month China's national reserves changed its export data.

Part of the increase in demand was due to price declines, with New York City’s main March contract falling to 88.50 cents on Tuesday to a 14-month trough, which is down about 60% from its record high reached in March.

However, buyers were encouraged by the increase in demand for high-quality cotton. Indian farmers decided to hoard cotton, making supply even tighter. India is the second-largest cotton exporter after the United States. Indian farmers expect prices to increase, and therefore reluctant sellers. cotton.

Buying pressure seems to provide support for cotton **, with new deals ranging from approximately 88-90 cents/lb and 94-96 cents/lb.

The US Department of Agriculture Agriculture Counselor in India confirmed that Indian farmers are hoarding cotton. He said farmers want the market to be stronger or the government to raise the minimum support price for farmers.

This week, officials from the US Department of Agriculture in other cotton-producing countries also issued reports. The Brazilian Counsellor anticipates that Brazil's output in Brazil in 2011-12 will be 9.5 million bales, which is expected to increase by 500,000 bales compared with the USDA, because of the expansion of planting area.

Brazilian government added that Brazil’s exports will double to 4.1 million bales.

The US Department of Agriculture official in Beijing reported that China is the world’s largest cotton producer, consumer, and importer. The US Department of Agriculture’s Counselor forecast is consistent with the existing figures of the US Department of Agriculture, but he agreed with the report of the Ministry of Agriculture’s website that the area planted next year It will shrink because of the poor prospects for the expected profit.

Although the government endeavored to establish a minimum price to ensure that farmers have better returns, farmers are generally dissatisfied with the current purchase price of seed cotton. According to the cotton grade, the purchase price is between 7-8.5 yuan (US$1.10-1.34) kilograms.

In addition, Australian Crops Bureau Abares reconsidered on Tuesday that domestic production is expected to record 1.1 million tons.