According to Angel Commodities, We expect cotton prices may trade sideways to down as new season arrivals expected to hit the major cotton physical market.
Cotton complex prices closed lower on Tuesday due to expectation of supply pressure from new season crops in coming weeks. Moreover, the mills have slow down the purchases of raw cotton due to higher domestic. NCDEX Kapas for Apr’17 closed lower by 0.74% while MCX Oct’16 cotton closed higher by 0.55%.
As per, the Cotton Association of India (CAI), the apex trade body of the fibre crop, The trade body has retained the cotton crop estimates for the year 2016-17 season at 336 lakh bales (of 170 kg each). The projected balance sheet drawn by CAI estimated total cotton supply for the cotton season 2016-17 at 398 lakh bales, while the domestic consumption is estimated at 309 lakh bales thus leaving an available surplus of 89 lakh bales.
Global Cotton Updates
ICE cotton trade flat on Tuesday after rose for the fourth straight previous session, supported by a steady dollar and indications of good harvest weather in the cotton belt areas of India and Texas.
We expect cotton prices may trade sideways to down as new season arrivals expected to hit the major cotton physical market. Moreover, traders and mills are expecting higher production from Maharashtra and Gujarat due to late rains in September. The prices may feel pressurize as mills have slowed down the purchase of kapas due to higher prices.
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