Cottonseed oil cake prices soar as supplies decline
Cottonseed oil cake prices have strengthened in the past few days as cotton arrivals are all but over in the mandis.
By ET Bureau | Updated:
AHMEDABAD/KOCHI: Cottonseed oil cake prices have strengthened in the past few days as cotton arrivals are all but over in the mandis. Ginners in Gujarat and Maharashtra who are currently holding huge cotton stock are demanding that the government further allow export of 10 lakh bales (one bale weighs 170 kg) this season. On Wednesday, cottonseed oil cake for delivery in September increased by 0.08% to Rs 1,243 per quintal with an open interest of 3270 lots on the NCDEX.
Oil cake for delivery in July stabilised by 0.17% to Rs 1,160 per quintal with a business turnover of 43,220 lots. Devendra Sonulakar of Lakshmipati Trading Company at Kola tehsil in the Vidarbha region of Maharashtra said the availability of cotton and cottonseeds was negligible in the past few days ensuring prices to be stable and slightly higher at some places. “Most of the stock is with traders who are not releasing it,” he said.
On the spot market, cottonseed prices were ruling at Rs 1,450 per quintal with arrival in Akola mandi being 1,000-1,500 bags of 50 kg each. Market analysts said the restricted supply leading to low inventories on the spot market was ensuring an uptrend movement in cottonseed prices. The trend is likely to continue in the short run. However, the south Indian milling industry fears a tight supply situation in the market with the government decision to export 10 lakh bales.
Millers said such a step will pull down the carryover stock and raise the prices as festival demand picks up by August and will not benefit farmers as they have liquidated almost their entire stock by March. The additional exports will deplete cotton stocks. “Now only 25 to 30 lakh bales may be left, which is sufficient for just a month’s consumption,” said BK Patodia, chairman and MD of GTN Textiles. As demand gathers momentum by August after the current lean months, supply will be under pressure.
“Cotton export was suspended for three months early this year when there was a robust demand. And now as it is revived, the demand has become weak and output is down,” said The Southern India Mills’ Association secretary general Dr K Selvaraju.
Oil cake for delivery in July stabilised by 0.17% to Rs 1,160 per quintal with a business turnover of 43,220 lots. Devendra Sonulakar of Lakshmipati Trading Company at Kola tehsil in the Vidarbha region of Maharashtra said the availability of cotton and cottonseeds was negligible in the past few days ensuring prices to be stable and slightly higher at some places. “Most of the stock is with traders who are not releasing it,” he said.
On the spot market, cottonseed prices were ruling at Rs 1,450 per quintal with arrival in Akola mandi being 1,000-1,500 bags of 50 kg each. Market analysts said the restricted supply leading to low inventories on the spot market was ensuring an uptrend movement in cottonseed prices. The trend is likely to continue in the short run. However, the south Indian milling industry fears a tight supply situation in the market with the government decision to export 10 lakh bales.
Millers said such a step will pull down the carryover stock and raise the prices as festival demand picks up by August and will not benefit farmers as they have liquidated almost their entire stock by March. The additional exports will deplete cotton stocks. “Now only 25 to 30 lakh bales may be left, which is sufficient for just a month’s consumption,” said BK Patodia, chairman and MD of GTN Textiles. As demand gathers momentum by August after the current lean months, supply will be under pressure.
“Cotton export was suspended for three months early this year when there was a robust demand. And now as it is revived, the demand has become weak and output is down,” said The Southern India Mills’ Association secretary general Dr K Selvaraju.
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