PRESENTATION ON T T Limited Indian Cotton

PRESENTATION ON T T Limited

Indian Cotton story… Figures are in mln bales Of 170 kgs each

Today we shall discuss… • • • About the Indian crop Varieties of Indian Raw Cotton Specifications of various types Pros and cons of Indian types Relevant issues pertaining to trade with Bangladesh • Indian cotton market today

About the Indian crop… • 3 rd year in running, bumper crop expected – 27. 00 million bales of 170 kg (10% more than last season) • Both area and productivity has grown • Estimates for 2012 is between 39. 0 to 45. 0 mln bales • Quality is better due to use of better quality and BT seeds • Trash levels/contamination is relatively lower due to better ginning practise and BT seeds • Average length of cotton fibre is growing due to BT seeds – hence shortage of short length fibre • All cotton is double roller gin except J 34 • J 34 (27 mm), Shankar 6 (28 mm+) and MCU 5 (30 mm+) are the popular varieties • Lustre, dye absorption and neps is amongst the best in the world

Current Balance Sheet is… (in million bales of 170 kg each) 2005 -2006 – 2007 SUPPLY Opening Stock 7. 20 5. 60 Crop 24. 60 27. 00 Imports 32. 20 33. 10 DEMAND 21. 70 24. 00 4. 70 4. 80 26. 40 28. 80 5. 60 4. 40 Consumption Exports CARRY OVER … Carry forward stock has come down, leading to pressure on prices

…and regionwise break up is STATES 2006 -07 AREA PRODN PUNJAB 5. 88 2. 60 HARYANA 5. 33 1. 70 RAJASTHAN 3. 50 0. 80 GUJARAT 23. 90 9. 30 MAHARASHTRA 31. 24 5. 20 M. P. 6. 30 1. 80 A. P. 9. 62 3. 20 TAMIL NADU 1. 33 0. 50 KARNATAKA 3. 70 0. 60 OTHERS 0. 78 0. 10 LOOSE LINT 1. 20 TOTAL 91. 58 27. 00 YIELD 752 542 389 662 283 486 565 639 276 218 501 AREA 5. 57 5. 83 4. 71 19. 06 28. 75 6. 20 10. 33 1. 40 4. 13 0. 79 2005 -06 PRODN 2. 00 1. 30 1. 10 8. 90 3. 60 1. 80 3. 20 0. 55 0. 65 0. 10 1. 20 86. 77 24. 40 YIELD 610 379 397 794 213 494 527 668 215 478 NOTE: AREA IS IN HECTARES/PRODUCTION IN MILLION BALES OF 170 KGS/YIELD IS IN KGS/HECTARE

India has wide range of cotton… • • • Shankar 6 Bunny MCU 5 DCH 32 LRA Mech 1 H 4 J 34 V 797 Etc etc… …caters to need of yarn from 4/1 to 120/1

…and their basic specs are Type Length(mm) Mic Strength (gpt) Trash (%) S 6 27. 5 – 29. 0 3. 5 – 4. 9 28 - 30 2 -3 MCU 5 30. 0 – 32. 0 3. 5 – 4. 9 29 – 32 2 -3 DCH 32 34. 0 – 36. 0 2. 8 – 3. 8 31 – 33 2 -3 Mech 1 28. 0 – 29. 0 3. 5 – 4. 9 27 – 28 3 -4 Bunny 29. 5 – 31. 0 3. 5 – 4. 9 28 – 29 2. 5 – 3. 5 H 4 27. 0 – 28. 0 3. 5 – 4. 9 26 – 27 3 -4 J 34 25. 5 – 28. 0 4. 0 – 5. 0 25. 5 – 27 4 -5 LRA 25. 0 – 27. 0 3. 5 – 4. 9 25 – 27 3. 5 – 4. 5 Y 1 24. 5 – 25. 5 4. 0 – 5. 2 24 – 26 4 -5 V 797 23. 0 – 24. 0 4. 5 – 6. 0 20 - 22 12 - 15

Why Indian cotton ? Type Pros Cons S 6 Excellent grade, absorption, lustre and strength Contamination MCU 5 Good staple length, lustre, absorption and strength Contamination DCH 32 Staple length, strength Low micronaire, relatively higher trash Mech 1 Cheaper than S- 6 Marginally low on all parameters agst S-6 J 34 Good dye absorption, high mic/maturity High Trash H 4 Price lowest in its length peers Low uniformity/grade Bunny Price lowest in its length peers Grade lower than MCU 5 LRA Trash lower than J-34 Mic variance high, grade lower than J 34 V 797 Inspite of high trash, final yarn good as it falls out & good lustre High trash

Relevant issues for Bangladesh… • High incidence of freight – 1 to 2 cents/lbs extra cost agst Far East countries • Availability of a standard recognised laboratory to settle disputes amicably • Lack of proper weightment facilities in Chittagong and many factories sites • Popular misconceptions of Indian cotton – Shankar 6 ? – only in Gujarat – MCU 5 ? – only in A. P/Tamil Nadu/Orissa • Another misconception – Indian cotton not good for knitting yarn: all Indian mills making knitted yarn from this cotton • Mic values/strength/nep levels are very good in S 6 – comparable with any origin • Indian shippers have no system of hedging/buying forward, hence difficult for them to sell forward – better to buy prompt • Correlation with NY Futures is low

India’s cotton market today… • Arrivals have dropped to about 27000 bales per day agst 40000 bales last year same time • Total arrivals for the season have crossed 24. 5 mln bales agst 21. 0 mln bales last yr • Ginners are holding good quality stock in anticipation of price increase as ending stocks are expected to be lower than last yr • Spot prices have softened a bit due to poor yarn mkt and rupee appreciation • Import contracts of over 125, 000 bales of medium staple cotton have been contracted in last one mth • Low staple cotton availability is very low • Expected fall in acreage in Gujarat in 2007 -08(origin of Shankar 6) expected, as cotton may be replaced by sugarcane etc