SIMA NEWS CLIPPING

May 24, 2016

Planting Progress, Chinas Reserve Auctions

Driving Market

cottongrower.com

The bullish side of the fundamental equation still must work from a defensive
posture, as long term fundamentals continue to favor pressure on prices
China continues to chip away in its hunt to satisfy mill needs to obtain high quality
cotton to mix with the low quality domestic stocks on hand. Sales to China include
both government and private mill purchases. This suggests China will continue to
be seen in the export market, just at a much lower level than in the prior five
years. The demand for cotton imports into China will remain solid, but only for
high quality
Full Text at end

Centre invites stakeholder comments on Bt

cotton guidelines

Business Line 24.5.2016

Five days after notifying the guidelines for Bt cotton technology which placed a cap
on royalty for new genetically modified (GM) traits, the Union government has
invited comments and suggestions of stakeholders on the matter
Full Text at end

Cotton blooms on short supply

Business Line 24.5.2015

Tight supply of good quality cotton pushed up the fibres price on Monday. With
this, good demand from domestic mills supported the price to go up. Traders said
that arrival of cotton has declined and absence of good quality cotton in current
arrivals has mainly increased the price
Full Text at end

Textile transporters begin indefinite strike

in Surat

indianexpress.com

Surat Textile Goods Transport Association (STGTA) on Monday began its indefinite
strike against crackdown by the Surat Municipal Corporation (SMC) on transport
company godowns in residential areas in the last three days
In this connection, Surat Textile Goods Transport Association president Mr Yuvraj
Deshle stated that the Surat Municipal Corporation officials have sealed many
godowns and offices stating that they had been causing traffic bottlenecks. Most of
the godowns are not situated in residential areas and do not cause any nuisance to
the public.
Full Text at end

APTMA seeks release of cotton bales stuck at

Wagah

fibre2fashion.com

The All Pakistan Textile Mills Association, Punjab has urged the government to take
steps to ensure that 22,000 cotton bales stuck at the Wagha border for the last
one month are released quickly to keep the textile industry operational
Full Text at end

Telangana, the new hotspot for solar power;

to add 3,000 MW by next year

Business Line 24.5.2016

Telangana is set become one of the hot spots for solar energy development in the
country. It has seen the installation of over 520 MW in the past 12 months and has
handed over development of 3,800 MW through major tenders. This is part of the
States target of solar photovoltaic power generation of 5,000 by MW 2018-19
Full Text at end

Planting Progress, Chinas Reserve Auctions Driving Market

(cottongrower.com)
May 23, 2016 : Cotton futures had a couple of triple digit days this past
week, up and down. Yet, the bulls carried the week, if only slightly.
Nevertheless, the bullish side of the fundamental equation still must work
from a defensive posture, as long term fundamentals continue to favor
pressure on prices. Of course, that includes Mother Nature as a bearish
influence on the market not always a prudent decision. Nevertheless,
typical weather across the globe does speak to an increased crop size.
This weeks price boost came from a combination of influences: the
Monsanto decision to drop Burkina Faso (West Africa) from its customer
list, the rapid pace of Chinese sales from its reserve, the markets first
attempt to kill the U.S. crop due to cool, wet weather, and excellent U.S.
export sales. Granted, it would be much more exciting and price
productive if the market could uncover demand news. But, it is planting
season, so supply news must suffice.
The trading range continues. Yet, export sales did blossom with the prior
weeks price dip below 62.50 cents. Net sales of U.S. upland cotton rose
to 189,400 RB, up some 85 percent from the prior week. Pima sales
totaled 11,700 RB. Vietnam, Turkey, China, Pakistan and India were the
primary buyers of upland.
China continues to chip away in its hunt to satisfy mill needs to obtain
high quality cotton to mix with the low quality domestic stocks on hand.
Sales to China include both government and private mill purchases. This
suggests China will continue to be seen in the export market, just at a
much lower level than in the prior five years. The demand for cotton
imports into China will remain solid, but only for high quality.
The presence of Pakistan and India continue to point to the production
problems faced by the 2015 crop in both countries. Another positive note
for U.S. exports was that mills have viewed 61 cents plus, basis
December futures, as a very favorable pricing point for new crop delivery.
Some 50,200 RB were purchased for 2016/17 marketing year delivery
well above recent purchases of new crop. Another 4,000 RB of Pima were
also sold for 2016/17 delivery.
Continuing our theme that USDA took far too big of a bite out of its export
estimate, weekly export shipments totaled 232,900 RB of upland and
12,100 RB of Pima. Vietnamese and Chinese mills were the primary
delivery points. Recall our contention that hand-to-mouth buying by mills
has changed the delivery needs, and late season shipments will not slow

as much as in the past. That is, the immediate need shipments are
becoming more of the norm.
Cool, wet weather continues to delay grower planning activity. Yet,
planting progress, compared to past seasons, is very much in line with
planting date recommendations of respective state agricultural Extension
services. Empirical research does suggest that the coming week is the
primary planting week in much of the Mississippi River states for
maximum yields. However, some of the very highest yielding years were
associated with late planted cotton.
Thus, the long held adage tomorrows weather is more important than
todays in predicting cotton yield still seems to be the best bet. That is,
the cotton crop has more than ample time to catch up, and has proven it
can catch up. Thus, this weeks planting delays did spook the market a
bit. But typically, the market will kill the crop two or three times during
the planting season.
Of more concern, however, is the primary West African producer, exporter
and major competitor Burkina Faso a producer of high quality cotton
that sells in the market at a discount to Australian, U.S. and Brazilian high
grades. The dust-off with the seed company stands to create a yield
decline and support prices long term.
Chinese reserve sales have been as advertised and have added some
stability to the market. Speculators are credited with some of the weeks
bullish price activity, as both the old crop July and new crop December
hover around 62 cents as much as 150 points above the prior weeks
lows. Offerings by the Chinese government have been essentially fully
subscribed.
There was wonderment as to why daily offerings were reduced somewhat,
but that was only because the government had agreed to a total
reclassification before delivery. Sales volume had swamped the
reclassification process such that sales had to slow to allow the re-class
process to catch up. Nevertheless, the reduction was small, and no ill
effects were noticed.
It is of interest to observe the future rate of sales as the volume of
domestic crop cotton offerings will increase as the imported stocks are
worked lower. However, recalling the cheap wine analogy of several
months ago (If you price it cheap enough, someone will drink it), the
Chinese government has, in fact, priced the domestic low grades cheaper
than expected, and low grades have sold better than anticipated.
A lesson for wine drinkers, or more correctly, cotton traders. Salute!
The trading range continues. A failure in new crop to hold 60.50 spells a
test of 58 cents for the December contract. - By: Dr. O. A. Cleveland
Centre invites stakeholder comments on Bt cotton guidelines
(Business Line 24.5.2016)
New Delhi, May 23: Five days after notifying the guidelines for Bt cotton
technology which placed a cap on royalty for new genetically modified
(GM) traits, the Union government has invited comments and suggestions
of stakeholders on the matter.

The guidelines, notified by the Agriculture Ministry on May 18, capped the
royalty for new GM traits at 10 per cent of the maximum sale price of the
Bt cottonseeds a move that could affect Monsantos India operations.
The notification regarding guideline for Bt cotton technology issued on
May 18, 2016, will be put in the public domain for the period of 90 days,
in the same form for comments and suggestions of all stakeholders, a
release issued by the Agriculture Ministry on Monday stated. As per the
notified guidelines, after the initial five years, royalty would reduce by 10
per cent of initial value every year. If the GM technology loses its efficacy,
the technology provider would not be eligible for any royalty.
The guidelines also prescribed a new format for sub-licensing agreements
that all seed technology providers would have to sign with the seed
companies. If such an agreement is not signed within next 30 days, all old
agreements would be considered invalid, the notification said.
Cotton blooms on short supply
(Business Line 24.5.2016)
Rajkot, May 23: Tight supply of good quality cotton pushed up the fibres
price on Monday. With this, good demand from domestic mills supported
the price to go up. Traders said that arrival of cotton has declined and
absence of good quality cotton in current arrivals has mainly increased
the price. However, at the higher level demand has slightly moved down
which limited the gains. Gujarat Sankar-6 cotton was up by Rs 200 to Rs
35,500-36,200 per candy of 356 kg. About 12,000 bales of 170 kg each
arrived in Gujarat and 35,000 bales arrived in India. Kapas or raw cotton
gained marginally. Kapas was up Rs 5 to Rs 980-1,025 per 20 kg and gin
delivery kapas stood at Rs 1,030-60 . Cottonseed gained Rs 5 to Rs 470530.
Textile transporters begin indefinite strike in Surat
(indianexpress.com)
Surat city has over 170 textile markets consisting nearly 50,000 textile
trading shops on Ring Road area of the city.
May 24, 2016 : Surat Textile Goods Transport Association (STGTA) on
Monday began its indefinite strike against crackdown by the Surat
Municipal Corporation (SMC) on transport company godowns in residential
areas in the last three days.
Acting on the complaint of residents, the SMC has sealed over 70
transport godowns on Saturday and Monday as they were causing
nuisance and traffic problems. Of the total 300 textile goods transport
companies, over 150 have been functioning from residential areas in and
around textile markets, SMC officials said.
Surat city has over 170 textile markets consisting nearly 50,000 textile
trading shops on Ring Road area of the city.
STGTA president Yuvraj Deshle said, The SMC officials have sealed many
godowns and offices stating that they had been causing traffic
bottlenecks. Most of the godowns are not situated in residential areas and
do not cause any nuisance to the public. We have been trying to meet the
Surat Municipal Commissioner for the last three days, but to no avail.

APTMA seeks release of cotton bales stuck at Wagah

(fibre2fashion.com)
20 May, 2016: The All Pakistan Textile Mills Association Punjab has urged
the government to take steps to ensure that 22,000 cotton bales stuck at
the Wagha border for the last one month are released quickly to keep the
textile industry operational.
In a statement, APTMA Chairman Tariq Saud said the textile industry is
virtually closed due to shortage of cotton. He said the government should
patronise the industry by resolving important pending issues of industry.
He pointed out that Pakistan's textile industry is miserably lagging behind
immediate competitors Bangladesh, Vietnam and India.
Saud also appealed the government to save the flagship industry of
Pakistan for the sake of national economy by taking concrete steps in the
upcoming budget.
The APTMA Punjab chapter's Acting Chairman Syed Ali Ahsan also issued
a statement urging the Commerce Ministry to allow import of cotton from
India by enhancing the limit of 0.5 million bales through land route at the
Wagha border.
He also highlighted the case of stranded cotton bales at the Wagha border
despite import permit and opening up of Letters of Credit.
Ahsan said the failure of cotton crop, particularly in Punjab to the extent
of 44 per cent, has caused serious shortage of cotton affecting adversely
not only to the cotton farmers but also the whole supply chain of textile
industry.
"In order to meet consumption requirements, the industry has imported
cotton from all sources, including India," he said.
The Punjab-based textile industry has preferred to import through land
route at the Wagha border under the Import Policy Order 2008, which
restricts import of cotton to 0.5 million bales, he added. "A shortage in
cotton production during the current fiscal has forced the textile millers to
import cotton additional to the limit of 0.5 million bales," Ahsan said.
Telangana, the new hotspot for solar power; to add 3,000 MW by
next year
(Business Line 24.5.2016)
State government pushing for fast-track implementation of pending
projects
Hyderabad, May 23: Telangana is set become one of the hot spots for
solar energy development in the country, given the rapid strides it has
made since the States formation two years ago. It has seen the
installation of over 520 MW in the past 12 months and has handed over
development of 3,800 MW through major tenders. This is part of the
States target of solar photovoltaic power generation of 5,000 MW 201819.
G Raghuma Reddy, Chairman and Managing Director of Southern Power
Distribution Company of Telangana Limited, during a recent interaction
with BusinessLine,said, The State plans to use all of the power generated

by solar to meet the requirements of the agriculture, which has been

assured nine hours of power in two trances.
CM pushes projects
Identifying the problems of the power sector and the demand-supply
mismatch, Chief Minister K Chandrasekhar Rao has been pushing for fasttrack implementation of the power projects to ensure 24x7 supply to all
segments of power consumers, including agriculture and industries.
According to Reddy, the State has made arrangements for supply up to
7,000 MW through purchases.
While the installed capacity is about 5,200 MW, up due to recent addition
of two units and solar projects, the demand continues to be steady from
the industrial segment, which is being supplied 24x7 power. As of May 22,
the State has supplied 5,672 MW. The recent rains have brought down
the demand. While there has been lower demand from agriculture, the
power available is being supplied to industrial and other segments without
load shedding.
Recent development
In the past few months, the State has closed tenders worth over 3,800
MW of the proposed 5,000 MW solar power addition by 2018-19. ACME
Solar, Sky power, Adani Green, Suzlon, Mytrah, Gestamp, Shapoorji
Pallonji are among solar power developers engaged in building projects.
To streamline land acquisition process for projects, the State government
has come out with policies that facilitate faster implementation of
projects.
The developer is expected to pay a development charge of Rs 25,000 per
acre to the panchayat, which will accord swift permissions. There is
provision for VAT and stamp duty refund.