According to Angel Commodities, MCX Aug cotton continue to trade positive on Tuesday taking momentum to this week to close higher by 1.4% to close at 20,560 rupees per bale.
Angel Commodities' report on Cotton
MCX Aug cotton continue to trade positive on Tuesday taking momentum to this week to close higher by 1.4% to close at 20,560 rupees per bale. The prices recovered from one and half year lows touched earlier this month due to improving physical demand at lower prices. As on 13th Aug, area in Gujarat under cotton is lagging last year at 26 lakh ha compared to 26.7 lakh ha last year. As per farm ministry report, acreage under cotton in the country was 118 lakh ha so far, up from 112 lakh ha from a year ago. Since July, cotton futures have earlier slipped about 11% tracking higher cotton imports, good area and satisfactory monsoon progress in cotton growing districts in India but now recovered. USDA kept production forecast unchanged for India this month to 29 million bales while the consumption and Exports projections were down by 2% and 4.55% respectively for 2019/20 season. Trade data by Ministry of Commerce indicates that provisional shipments in the month of June 2019 are 88% lower at 60,000 (Vs 5 lakh bales) as compared to last year.
Cotton futures may trade sideways to higher due to improvement in physical demand but improved sowing; higher imports and weak international prices also weighing on price may limit price gains in coming weeks. Moreover, fresh spell of showers will limit damage to cotton crops and ensure good production this season in India.
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