World cotton prices continue to decline against the background of existing stocks in its main customers - the US and China. In these circumstances, the Azerbaijani consumers of cotton are formatted based on the local conditions of production and processing of raw cotton.
As of 19 November futures price for cotton №2 for delivery in March 2015 amounted to US $ 1.3047 per kg. In the context of Azerbaijan, where the yield is at minimum (15.2 quintals per 1 ha), and the government support of the industry is virtually absent (excluding subsidies in the amount of 40 manat per cultivated hectare), it means the profitability of crude at no more than 10%, experts say. Because of the low purchase prices in recent years the area under cotton in Azerbaijan decreased several times and makes 22,900 hectares this year.
Given this specificity, cotton companies buy or rent from farmers or the state large land areas and in fact are engaged in the cultivation of raw materials. They use modern methods of irrigation and plantation harvesting. To minimize manual labor part of this year's cotton harvest is mechanized.
The bulk of local raw materials (cotton fiber) is processed at the textile mills of the cotton companies, which are located in Baku, Sumgait, Ganja and Mingachevir. According to experts, it helps to minimize the impact of global trends on the price of raw cotton.
According to of the State Statistics Committee, as of November 1, ginneries bought 34,900 tons of raw cotton. This is 10.8% more than in the comparable period of 2013. Cotton is purchased from farmers at a price of 410-420 manat per 1 ton. Prices remained unchanged for 4-5 years.
According to the International Cotton Advisory Committee (ICAC), world production of cotton in 2014-2015 will decrease by 0.2% - to 26.1 million. Compared with the previous season, the consumption will grow by 4.5% - to 24.4 million tons.
Estimated by ICAC, for 2014, cotton prices have already fallen by 24% and in the season 2014-2015 they can balance at 66 cents per pound (450 grams) under the influence of China’s departure from the policy of reserve provisions.
Within 10 months of this year Azerbaijan produced 7 137.6 metric tons of cotton fiber, which is 65.3% more than in the comparable period of 2013. In warehouses of the cotton companies as of November 1, there were 4 225.1 tons of ready-to-implement fiber. During this same period exported abroad was cotton yarn for $ 12.6 million. This is 40% less than in the same period of 2013.
This year, the production of cotton in Azerbaijan amounted to 639,000 square meters, and bed linen - about 400,000 items. --08B--
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