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Cotton Mostly Firm In Central, South India On Mills' Demand

11 Oct 2018 3:23 pm
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MUMBAI (Commoditiescontrol) – Cotton prices traded mostly firm in central and south India on Thursday helped by mills buying despite subdued cues from international market.

Mills buying is very strong at present and they are buying to replenish inventory, which has dropped to significant level amid non-purchase of cotton since last 30-45 due to tight availability, said a trader from Aurangabad.

Exporters too are active in buying cotton as domestic rates are said to be competitive in the international market due to sharp fall in Indian rupee this year. India rupee has depreciated by around 16% so far this year, he said.

Cotton arrivals in the country today pegged at around 56,000 bales (170kg each) versus 53,500 bales on previous session.

Meanwhile, market players are slightly cautious as well ahead of USDA monthly supply-demand report schedule to release later today followed by U.S. weekly sales data on Friday .

It will be interesting to see whether USDA will go for any revision in India’s cotton crop. The agency in September has pegged India’s 2018-19 (Aug-Jul) cotton production at 366 lakh bales.

The Cotton Association of India has estimated country’s cotton crop for 2018-19 (Oct-Sept) at 348 lakh bales.

Many market players are expecting crop somewhere between 330-350 lakh bales.

A cotton broker from Ahmedabad said, “In case USDA revises India crop outlook lower then prices are expected to move higher in the coming days.”

ICE December cotton futures fell 0.5% at 76.32 cents per pound in electronic trade by 1520 IST, while MCX November contract dropped 0.1% at Rs 22,320 per bale.

According to traders, “Some temporary fall in prices can’t be ruled out as supply is likely to peak in the coming weeks, but lower crop expectations with decent domestic consumption may limit any significant fall.”

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

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