MUMBAI (Commoditiescontrol) – The upward trend in cotton prices continued today with an increase of Rs 100-300/candy in Central India and Rs 500/candy in South India, triggered by sluggish supply amid good demand.
Sluggishness was witnessed in arrivals in Central India as the markets were short of 1,000 bales receiving 78,000 bales compared to previous day. Maharashtra witnessed a fall of 2,000 bales and Gujarat witnessed a fall of 1,000 bales both receiving 33,000 bales each. However, the shortfall was covered by an increase in arrival of 2,000 bales at 12,000 bales in Madhya Pradesh.
Cotton arrival in South India was steady at 25,000 bales. Andhra Pradesh received 20,000 bales while Karnataka received 5,000 bales.
Supply witnessed a sharp fall in Central India of 33 percent compared to the season's peak on December 19 mainly due to artificial shortage of supply created by farmers in order to achieve a better price for their stock amid surging price in the NCDEX futures market.
The April contract on NCDEX futures settled higher 0.20 percent at Rs 979.5/per 20kg on Tuesday.
Ginners receiving a low raw material supply prompted them to limit their selling volume and push price higher in the spot and the futures market.
On the MCX, the most active January contract settled up 0.82 percent or Rs 170 at 19,710/bale on Tuesday. It was in the range of Rs 19,540-19,790/bale. Open Interest decreased 3.30 percent to 6,571 lots while volume increased sharply by 61 percent at 2,688 lots.
Whereas, the consistent rise in price was also supported by good demand from local mills who were purchasing to meet their near term requirement despite lackluster trade in yarn market.
Yarn price has witnessed an increase by Rs 5-10/kg over the week, however the demand remained hand to mouth as fabric manufacturers were not interested to purchase at a higher price as the demand from the retail level was dull.
Meanwhile, the only optimistic factor at present was the export prospect as it was receiving a good support from the depreciation of local currency against USD. The local currency weakened further and settled 11 paise down, registering a 1 month low, at 68.33.
(By Commoditiescontrol Bureau; +91-22-40015534)