Cotton Prices Edges Higher In North India Tracking Gains In ICE, MCX

MUMBAI (Commoditiescontrol)- Cotton prices edged higher in Punjab, Haryana and upper Rajasthan on Wednesday, tracking gains in MCX and ICE US.

Cotton was trading at Rs 4,315-4,400 per maund in Punjab. It was at Rs 4,340-4,440 per maund in Haryana. In upper Rajasthan, it quoted at Rs 4,340-4,345/maund.

Total daily arrivals today stood unchanged at 14,000 bales from Tuesday.

Globally, the most active cotton March contract on ICE Futures US settled firm by 0.64 cent, or 0.88 percent, at 73.4 cents per lb amid some bargain buying following losses in the previous two sessions, ahead of data from the US Department of Agriculture due later in the week and optimism over a trade deal between the United States and China.

The contact traded within a range of 72.65 and 73.74 cents a lb. Anticipation of a trade deal between the United States and China, and prospects for the USDA report later this week are helping prices.

The USDA, which has been hit by the partial shutdown of the US government, is expected to release its monthly crop supply/demand report on Feb. 8.

A US trade delegation will visit China in mid-February for a new round of talks to resolve the trade tussle.

Domestically, at the Multi Commodity Exchange (MCX), cotton for delivery this month was too trading higher by Rs 80 or 0.39 percent at Rs 20,630 per bale (13:30 hrs IST).

Meanwhile, against the backdrop an improvement in US-China trade relations there is a chance of more damage to India’s cotton yarn exports.

Chinese importers have reportedly renegotiated orders of Indian cotton yarn worth USD 400-500 million in the past few weeks.

Indian exporters said importers, import agents and Chinese bankers have defaulted, renegotiated confirmed orders or even cancelled shipments and letters of credit on 10-12 contracts without assigning proper reasons.

The US-China tariff war had benefited India. Between June and September 2018, the US announced high customs duties on several Chinese goods and China retaliated by increasing levies on US goods. Consequently, India’s exports to the neighbouring country increased by about 32 percent to USD 8.46 billion during the June-November period.

India exported USD 892.4 million worth of cotton yarn to China in April-November, up 2.5 percent from USD 870.2 million in 2017-18.

While China is the largest importer of cotton yarn with a share of 46.7 percent globally, India remains the largest exporter of cotton yarn in the world.