Cotton commodity in india demand and supply

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Cotton commodity in india demand and supply

  1. 1. COTTON Cotton is a soft fiber, grows around the seeds of thecotton plant It is the basic resource for thousands of consumerand industrial products The biggest cultivators of cotton are America, India,China, Egypt, Pakistan, Sudan and Eastern Europe US have a considerable share in world exports India and China both fall short of their domesticrequirement and are net importers
  2. 2. PRICE TRADE OF COTTON •Cotton prices fell across the board on domestic and international markets •As demand remains extremely weak amid large fiber and yarn inventories •Correction in cotton prices has done •Highest Price 245 Cents/lb •Lowest price 145 Cents/lb Source: Http://www.cottoninc.com
  3. 3. Demand
  4. 4. Demand (Total Demand 24.6m tonnes, Reduced by over 400,000 tonnes)Major factors of low Demand: Significant fall of Cotton Demand in China, accounts 30% of Global Cotton(Around a drop of 17% in the month of May 2011) Buyers’ future expectation(Waiting for new crop to come in the market) Substitution Effect(Result of rise cotton price, mills substituting cotton with -synthetic fibers, -notably polyester -and viscose (rayon)) The rapid rise and decline in cotton prices since September 2010, made cotton storage companies suffer great losses
  5. 5. Supply
  6. 6. Supply (Total Supply around 24.35m tonnes, 10.7% increase)Major factors affected Supply: Driven to a significant degree by the surging cotton prices • World Cotton Production: 26.8 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 increased production in key countries Improved seasonal conditions Higher plantings
  7. 7. CONCLUSION Cotton plays a significant role among the most useful commodities Its expected, price of Cotton will further fall down Cotton and cotton textile industries are central to the economic growth of both developed and developing countries It is the raw material of wealth, industrialization and development

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