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Cotton Prices Down In North India On Negative Global Cues

8 Feb 2019 11:27 am
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MUMBAI (Commoditiescontrol) - Cotton prices moved lower in Punjab, Haryana and upper Rajasthan on Friday, tracking overnight losses in ICE US.

Cotton was trading at Rs 4,320-4,400 per maund in Punjab. It was at Rs 4,340-4,440 per maund in Haryana. In upper Rajasthan, it quoted at Rs 4,310-4,355/maund.

Total daily arrivals today stood lower at 12,000 bales from 11,500 bales on Thursday. Rainfall and cloudy weather conditions in most parts of North India, including Punjab and Haryana, mainly affected arrivals.

Globally, the most active cotton March contract on ICE Futures US settled down by 85 points at 72.81 cents per lb on Thursday on new concerns that the US-China trade war may stretch beyond a March 1 deal deadline, with the two countries’ leaders unlikely to meet during upcoming talks.

News that US President Donald Trump and China’s Xi Jinping are unlikely to meet dashed hopes that the two sides were progressing on a deal to end a bitter trade fight.

Earlier on Thursday, White House adviser Larry Kudlow said in an interview on Fox Business Network that there was a sizable distance to go in US-China trade talks.

The USDA on Thursday also published exports sales for the week ended December 27, which were significantly down from the previous week at 228K RB. But lows sales were not a concern as this period included Christmas holidays also.

Market participants are now waiting for a long list of US Department of Agriculture crop forecasts and estimates due on Friday after key reports were delayed due to the 35-day partial government shutdown.

Domestically, 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.

At the Multi Commodity Exchange (MCX), cotton for delivery this month was trading lower by Rs 60 or 0.29 percent at Rs 20,620 per bale (11:55 hrs IST).


(By Commoditiescontrol Bureau)


       
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