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Cotton Prices Rule Steady To Firm In Central, South India

7 Feb 2019 3:32 pm
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MUMBAI (Commoditiescontrol) - Cotton prices ruled steady to firm at major markets in Central and South India on Thursday amid selective demand and further cut in production estimates.

Cotton prices are expected to remain firm this year due to lower production in the country, apart from rising consumption in both the domestic and overseas markets, exporters and analysts said.

Prices may rise by March end, when market despatches will reduce. A weakening of the rupee will also help overseas demand for India’s cotton exports, they said. India shipped about 25 lakh bales of cotton in the four months ended January to Bangladesh, Pakistan, Indonesia, Vietnam and China.

According to Atul Ganatra, president of Cotton Association of India, prices are expected to go up by March end. “We have shipped 25 lakh bales from October to January and we have kept a target to export 51 lakh bales. This will be lower than 68 lakh bales we exported last year,” he said.

Meanwhile, the Cotton Association of India (CAI) on Thursday lowered its estimate of the cotton crop for the third time in a row by 5 lakh bales than its previous estimate to 330 lakh bales of 170 kgs. each for the 2018-19 season.

The estimated crop size of 330 lakh bales is lowest in a decade. Following this, India is set to lose its status of 'numero-uno cotton producer' in the world to China.

The CAI in its latest January 2019 estimate for India's cotton crop, has reduced the crop estimate for Telangana by 2.50 lakh bales, Andhra Pradesh by 50,000 bales and Karnataka by 2 lakh bales. The main reason for lower crop is that in the Southern Zone farmers have uprooted their cotton plants due to moisture deficiency as a result of which there is no scope for 3rd and 4th pickings.

The total cotton supply projected by the CAI during the months of October 2018 to January 2019 is 198.80 lakh bales, which consists of the arrival of 170.32 lakh bales upto 31st January 2019, imports of 5.48 lakh bales upto 31st January 2019 and the opening stock at the beginning of the season estimated at 23 lakh bales.

Globally, the most active cotton March contract on ICE Futures US settled firm by 0.26 cent, at 73.66 cents per lb on Wednesday on optimism about export sales to be announced today.

Export sales announced last Thursday for a week before Christmas, ending 21st Dec was highest in this marketing year. Market is now hoping that same pace of export will continue for the post-Christmas week export also that is to be announced today.

Domestically, at the Multi Commodity Exchange (MCX), cotton for delivery this month was trading lower by Rs 30 or 0.14 percent at Rs 20,690 per bale (16:20 hrs IST).



(By Commoditiescontrol Bureau)


       
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