Weekly: Cotton Ends Mostly Higher; But Mills' Buying Slow

MUMBAI(Commoditiescontrol): Cotton prices earlier during the first couple of days of this week recorded good gains, but prices started to recede from Wednesday onwards and remained under pressure since then due to slow buying by mills as they opt cautious approach due to dull demand in cotton yarn followed by subdued cues from international market as US cotton shed 2% this week.



The benchmark premium variety (30mm) cotton in Maharashtra rose 0.6% to trade at Rs 41,650/candy against same period a week ago, but the Gujarat S6 (30mm) decreased by 0.94% to Rs 42,200/candy. In Telangana and Karnataka cotton prices were up by 0.12% and 0.96% respectively. The difference in prices of Gujarat and Maharashtra were mainly due to quality.

The relative comfortable stock position in the country with normal monsoon forecast has made mills slighty cautious to do bulk buying. Further mostly mills have procured sufficient cotton to meet their demand ahead.

According to recent Cotton Association of India (CAI) balance sheet, mills as on April 30 are holding around 52 lakh bales (170kg) of cotton, which is equivalent to 2 month of estimated domestic consumption.

Haryana Govt Sets 2018-19 Cotton Production Target At 26.38 Lakh Bales (Full Report)

Mills are not in a hurry at all now as they were till last week.This is becuase of slow demand in cotton yarn, said a trader from Coibatore. Cotton prices in recent weeks rose relative higher than cotton yarn and thus weighed on cotton demand, he added.

Many mills preferred to shift to synthetic yarn or man made fibre, which provide lucrative return and said to be in good demand, he noted.

India 2017-18 Cotton Arrivals Reach 311 Lakh Bales Till April 30 - CAI (Full Report)

On the other hand, export of cotton continued at good pace with India so far (April) have shipped around 61 lakh bales of cotton and with 5 months left for season the numbers are likely to get better and better as Indian prices are competitive in the international market.

Cotton sowing in Punjab and Haryana has started, but lagged pace due to lack of sufficient water in canals for irrigation till last week, however farmers have raised confidence that soon it will improve as irrigation department is working to increase flow of water in canals and likely to help to complete sowing by month-end.

Cotton Stock As On Apr 30 With Ginners, MNC's, CCI & MCX At 45.85 Lakh Bales - CAI (Full Report)

Arrivals of cotton have declined each passing day during the week with average daily arrivals stood at 56,166 bales, down from 67,900 bales a week ago. According to CC compiled arrivals data, total new crop arrivals, since Oct 1, have reached 29.05 million bales, up 5.57% from 27.73 million bales arrived during the same period last year.

CAI has pegged cotton arrivals as on April 30 of this season started from October stood at 311 lakh bales.

Cotton May futures declined 0.62% to settle this week at Rs 20,6920 per bale. The contract during the week ranged between Rs 20,600-21,040 per bale.

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(By Commoditiescontrol Bureau; +91-22-40015533)