Angel Commodities report on Cotton
Cotton complex prices recovered on Monday form the lower level on bargain buying by the market participants. Earlier, prices were under pressure on slowing physical demand from the textile industry and expectation of better production as acreage have improved in Gujarat and Maharashtra. NCDEX Kapas for Apr’17 closed 0.65% higher while MCX Oct’16 cotton closed higher by 0.84%.
Cotton production in the country is expected to hit a seven-year low in 2016-17 because of a reduction in the area under cultivation and pest attacks in top producer states. Imports may see a new high this fiscal as the overall area where cotton has been sown has declined.
Global Cotton Updates
ICE cotton futures registered their biggest intraday percentage gain in 11 days on Monday as investors covered short positions ahead of a weekly crop progress report from the US Department of Agriculture.
We expect cotton prices may trade sideways to higher as market participants may buy from lower levels. There is less demand from industrial buyers and expectation of better production as there is good weather across cotton sowing states like Gujarat and Maharashtra. Production estimated for next season and dwindling cotton supplies is keeping prices supported.