MCX cotton fell close to 3% last week and slipped to 4-month low (21,500 levels). However, it recovered and close at 21,640 rupees per bale.
Due to higher domestic prices there will be higher imports of about 31 lakh bales this season. In April, cotton prices increased to highest levels in 2019 but now correcting. USDA in its latest monthly India will be back to number one position in 2019/20 season with projected production of 28.5 million bales. Recently, CAI has projected cotton exports at 46 lakh bales, a tad lower than earlier estimate of 47 lakh bales due to higher prices and smaller crop size. Due to small crop size closing stock as on September 30, 2019 is estimated by the CCI’s Cotton Crop Committee at 13 lakh bales of 170 kgs each.
Outlook
Cotton futures expected to trade sideways to lower on reports of increase imports, decreased exports and weakness in International cotton.
Moreover, forecast of near normal monsoon, improving in imports and decreasing exports may be bearish for prices.
Source: moneycontrol.com