-Presentation_Mr._Carl_Peltzer

“A Merchants outlook to Indian Cotton”

How the world perceives Indian cotton Quality Over Time

Over the last decade the average grade has come down Moisture content in the bales have gone up Trash levels have increased

80%

10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00%

70% 60% 50% 40% 30% 20%

As a result Indian is the only cotton being sold under moisture and trash guarantees.

More and more emphasis on HVIs than hand staple Relative discount to other growths have increased.

Lack of universal standards – last year Middling quality was selling at 400 pts range!!

Contamination and Adulteration What supports: Organic Cotton (unique) Longer staples like 30 mm+ (fairly unique) Spot Cotton / Transit

10% 0% 2008 Grade A

2013 Grade B

2018

Grade C

Mositure

Trash

Relative Values paid by Customers 1200 1000 800 600 400 200 0 20008

2012 GC 31-3-36

Brazillian

2015 Indian

2018 WAF

Perspective from individual markets All prior to the Big MSP move and growing US and Brazil crops.

China Volume & Share 300000

17%

250000

15%

200000

13%

150000

11%

100000

9%

50000

7%

0

Market Share in China is at best stable Volume largely dependent on Chinese imports Probably the best paying market So what is China buying now?

How is the market structure

5% 14/15

15/16 Indian Export

16/17

17/18

Share of Export

Bangladesh Volume & Share 450000

31%

400000

29%

350000

27%

300000

Dropping Market share in Bangladesh Stable volume but large portion is organic and business with Mills on ICA default mills

25%

250000

23%

200000

21%

150000 100000

19%

50000

17%

0

15% 14/15

15/16 Indian Export

16/17 Share of Import

17/18

So what is Bangladesh buying now?

How is the market structure

Perspective from individual markets Pakistan Volume & Share 500000 450000 400000 350000 300000 250000 200000 150000 100000 50000 0

70% 60% 50% 40% 30% 20% 10% 14/15

15/16 Indian Export

16/17

17/18

Market Share in Pakistan is dropping Highly variable volume as depends completely on their own crop and relative values Extremely competitive and low margin So what is Pakistan buying now?

How is the market structure

Share of Import

Vietnam Volume & Share 250000

30%

200000

25% 20%

150000 15%

Stable Market share in Vietnam Lot of business with mills on ICA default mills.

Low end market so again very competitive

100000 10% 50000

5%

0

0% 14/15

15/16 Indian Export

16/17 Share of Import

17/18

So what is Vietnam buying now?

How is the market structure

Indian Mills – what they should look at Long term, the surplus has a declining trend growing dependence on Imports Cost to carry, capital deployment v/s imports

Surplus 4,000

20%

3,000

15%

2,000

10%

1,000

5%

0

0% 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Being aware of relative values buying what is “relatively cheap” and not necessarily the cheapest

-1,000

-5%

-2,000

-10%

-3,000

-15%

-4,000

-20%

-5,000

-25% Prod - (Cons + Exp)

Timing of Imports 1000 ON in January or 1200 ON in June

As % of Cons

Linear (As % of Cons)

Mali Production Breakup

Being open to “Other growths” Actual production of Juli/S is 13% but 80% of Mali sold as Juli/S What value is 41-4 versus 41-3 Risk Management or Procurement

35% 30% 25% 20% 15% 10% 5% 0% Juli/S

Juli

Kati

Kati/C

Others