Els Cotton Sees Better Enquiries
The demand for the extra-long staple (ELS) cotton has remained strong in the international market due to the enticipated lower output in cotton producing countries and good buying support from consuming nations. This is likely to lead to a surge in prices of such qualities in the coming season.
The Giza varieties of Egypt and the Pima grades of the US are the prominent ELS cotton types.
Egyptian cotton: In the last one month there has been good demand for ELS cotton. Certain mills are willing to buy qualities like Giza-70 to cover themselves for the rest of the season. The Giza-86 variety was also sought, particularly from those wanting to re-sell their cotton. Some business was also reported in other Egyptian grades. There are reports that, in the coming season, Egypt will have a smaller crop because of the reduction in acreage.
The quality and quantity of cotton likely to be produced in Egypt will be cleared by next month. However, one thing is certain that the varieties which India has been buying from Egypt have already been exhausted in the current crop season.
It is also quite likely that Egypt may start its new season with higher prices because of an indication of smaller production in the new season.
American Pima: There is good demand for American Pima from certain select mills which have chosen to cover their requirements for the remaining portion of the year. Shippers report that, in the 1999-00 crop, US Department of Agriculture (USDA) has classed about 93 per cent cotton as Grade-2. As a result, Grade-3 is practically not available as most of it is already sold to US and export markets. There has also been a lot of enquiries for American Pima.
The inclement weather arrives in the valley only in the month of November. July and August will be crucial months for plants to make fruit.
Last season's yield was 1128 lbs per acre and the 5-year average was 1072 lbs. This average went down because in two years of the period, American Pima had a poor average running into 900 lbs per acre. In the coming season, the crop is estimated at about 450,000 balesless by 124,000 bales compared with the 1999/ 2000 season.
The additional factor to note is that China is issuing import license for about 20,000 metric tonne for ELS qualities. It is also reported that China recently bought about 4,000 / 5,000 tonne in the first week of May.
Several countries like Japan and Korea buy American Pima of 2000/2001 crop and, according to the export registrations, about 95,000 bales of 2000/ 2001 crop are already sold.
Under these circumstances, Pima prices will see new levels very shortly.