COTTON COTTON Cotton is a soft fiber, grows around the seeds of the Cotton is a soft fiber, grows around the seeds of the cotton plantcotton plant

It is the basic resource for thousands of consumer It is the basic resource for thousands of consumer and industrial products and industrial products

The biggest cultivators of cotton are America, India, The biggest cultivators of cotton are America, India, China, Egypt, Pakistan, Sudan and Eastern EuropeChina, Egypt, Pakistan, Sudan and Eastern Europe

US have a considerable share in world exportsUS have a considerable share in world exports India and China both fall short of their domestic India and China both fall short of their domestic requirement and are net importersrequirement and are net importers

PRICE TRADE OF COTTONPRICE TRADE OF COTTON

•Cotton prices fell across the Cotton prices fell across the board on domestic and board on domestic and international marketsinternational markets

•As demand remains As demand remains extremely weak amid large extremely weak amid large fiber and yarn inventories fiber and yarn inventories

•Correction in cotton prices Correction in cotton prices has donehas done

•Highest Price 245 Cents/lbHighest Price 245 Cents/lb

•Lowest price 145 Cents/lbLowest price 145 Cents/lb

Source: Http://www.cottoninc.comSource: Http://www.cottoninc.com

DemandDemand

DemandDemand(Total Demand 24.6m tonnes,(Total Demand 24.6m tonnes, Reduced by over 400,000 tonnes)Reduced by over 400,000 tonnes)

Major factors of low DemandMajor factors of low Demand:: Significant fall of Cotton Demand in China, accounts 30% of Global Significant fall of Cotton Demand in China, accounts 30% of Global

Cotton Cotton (Around a drop of 17% in the month of May 2011)(Around a drop of 17% in the month of May 2011)

Buyers’ future expectationBuyers’ future expectation(Waiting for new crop to come in the market)(Waiting for new crop to come in the market)

Substitution EffectSubstitution Effect(Result of rise cotton price, mills substituting cotton with (Result of rise cotton price, mills substituting cotton with -synthetic fibers, -synthetic fibers, -notably polyester-notably polyester -and viscose (rayon))-and viscose (rayon))

The rapid rise and decline in cotton prices since September 2010, made The rapid rise and decline in cotton prices since September 2010, made cotton storage companies suffer great lossescotton storage companies suffer great losses

SupplySupply

SupplySupply(Total Supply around 24.35m tonnes, 10.7% increase)(Total Supply around 24.35m tonnes, 10.7% increase)

Major factors affected SupplyMajor factors affected Supply:: Driven to a significant degree by the surging cotton pricesDriven to a significant degree by the surging cotton prices

• World Cotton Production: 26.8 Millions of metric tonsWorld Cotton Production: 26.8 Millions of metric tons• World Cotton Exports: 8.3 Millions of metric tons World Cotton Exports: 8.3 Millions of metric tons

Production increased by between 9.6% and 13% as the result of Production increased by between 9.6% and 13% as the result of increased production in key countriesincreased production in key countries

Improved seasonal conditionsImproved seasonal conditions

Higher plantingsHigher plantings

CONCLUSIONCONCLUSION

Cotton plays a significant role among the most useful Cotton plays a significant role among the most useful commoditiescommodities

Its expected, price of Cotton will further fall downIts expected, price of Cotton will further fall down

Cotton and cotton textile industries are central to the economic Cotton and cotton textile industries are central to the economic growth of both developed and developing countriesgrowth of both developed and developing countries

It is the raw material of wealth, industrialization and It is the raw material of wealth, industrialization and developmentdevelopment