MUMBAI (Commoditiescontrol) – Cotton exhibited mixed trend in central and south India on Wednesday due to prevailing scattered buying and selling activity.
Demand and supply both at present are thin in the market, said a trader from Jalgaon. Mills are gearing up for new season, but crop this season has been delayed by 15-20 days at least due to late sowing operations earlier amid slow monsoon progress, he added.
It’s a wait and watch condition for mills now, but they are likely to procure cotton once new crop sets in with good pace as stocks with them depleting at faster pace, he noted.
Further the domestic factors are very much price supportive and future outlook is very much optimistic as India cotton exports prospects are better due to escalating trade war between U.S. and China, he said.
China is the biggest buyer of U.S. cotton, but the trade tension is likely to prompt them to look for alternate source to meet its demand, he added.
According to industry experts, “India cotton export to China is likely to rise sharply as imports from U.S. will attract 25% tariff, while Indian cotton has remained competitive so far supported by weak rupee."
Further production of cotton is also likely to be somewhat lower than last year due to dry weather in key Gujarat state, which was also seen in government first advance estimates.
The government in its first advance estimates for Kharif 2018-19 pegged cotton crop lower by 6.90% at 324.8 lakh bales (170kg) versus 348.88 lakh bales a year ago.
ICE December cotton futures rose 0.6% at 79.47 cents per pound in electronic trade by 1655 IST, while MCX October cotton contract was up 0.2% at 22,330 per bale.
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(By Commoditiescontrol Bureau; +91-22-40015533)
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