Cotton futures traded firm at Rs 18,100 per bale on September 28 as participants widened their positions, as seen from the open interest.
The market expects Indian cotton exports to surge by nearly 30 percent in the 2020-21 season following attractive cotton prices, said Mohit Vyas, an analyst at Kotak Securities. He expects cotton to continue with marginal gains this week as well but upcoming new crop arrivals in domestic market, CCI continuing to offload its old cotton stock and bumper production prospects may cap gains and keep it range-bound with bias being on the positive side.
According to agriculture ministry data, Indian cotton output this year may be in excess of 371 lakh bales, compared to 355 lakh bales produced last year.
Cotton arrivals across the country during September 1-25 have more than doubled from the previous month at 49,530 tonnes, but it is still down by 31 percent from last year, as per Agmarknet data.
In the futures market, cotton for October delivery touched an intraday high of Rs 18,180 and an intraday low of Rs 17,880 per bale on the MCX. So far in the current series, the commodity has touched a low of Rs 16,060 and a high of Rs 18,260.
Cotton futures for October delivery gained Rs 70, or 0.39 percent, to Rs 18,100 per bale at 7:36 pm IST on a business turnover of 779 lots. The same for November contract rose Rs 160, or 0.89 percent at Rs 18,120 per bale with a business volume of 410 lots.
The value of October and November’s contracts traded so far is Rs 12.76 crore and Rs 2.02 crore respectively.
Kotak Securities expects cotton to consolidate near current range this week but upcoming supply pressure from the US will keep long term outlook marginally weak.