Cotton futures traded slightly higher at Rs 18,100 per bale on September 24.
Support from reduced inventory projection by United States Department of Agriculture (USDA) for India, improved export demand, crop loss concerns in major cotton-producing states, and recovery in ICE Cotton futures from lower levels have helped the commodity reach above Rs 18,000 this week, said Mohit Vyas, Analyst at Kotak Securities.
According to agriculture ministry data, Indian cotton output this year may cross above 371 lakh bales (170 kg) compared to 355 lakh bales produced last year.
Cotton arrivals across the country during September 1-20 have more than doubled from the previous month at 33,270 tonne, but is still down by 22 percent from last year, as per Agmarknet data.
In the futures market, cotton for October delivery touched an intraday high of Rs 18,100 and a low of Rs 18,040 per bale on the Multi-Commodity Exchange (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 40, or 0.22 percent, to Rs 18,100 per bale at 15:43 hours IST on a business turnover of 779 lots.
The value of October contract traded so far is Rs 2.80 crore.
Kotak Securities expects cotton to trade steady in the near future.