Taking a cue from global markets, cotton corrects 6%
Prices in the spot market hit a two-month low of Rs 21,000-21500 per bale of 170 kg on Monday.
Commodity Summary MCX
Prices in the spot market hit a two-month low of Rs 21,000-21500 per bale of 170 kg on Monday. On the MCX, May futures were being quoted at Rs 21,240 per bale, indicating a further fall in prices, according to traders.
“Market sentiments are weak with escalating trade war between America and China and there is a slump in the international cotton market. In the past 10 days, we have seen how the rate of New York cotton came down by 13 per cent at 68 cents per pound which is the lowest in the season.
In the Indian market, too, prices are down by 2 per cent to 4 per cent,” said Atul Ganatra, president of the Cotton Association of India.
The prices have not seen a steep fall as the government agency, Cotton Corporation of India, was holding over 9 lakh tonne bales of cotton while ginning factories have more than 27 to 28 lakh tonne bales.
“People holding the stock are not ready to sell due to shortage in the domestic market, so we have not seen a major price fall in the physical market,” said Ganatra.
On future prices, Ganatra said a lot will depend on global markets and on the arrival of monsoon in the country.
Anuj Gupta, deputy vice-president of commodity research at Angel Broking, said that in the short term, investors or traders should sell their positions with a target of Rs 20,000 per bale on MCX as the international market is expected to touch 60 cents in the coming days. “Higher imports by domestic ginners and global crisis can further push down prices,” Gupta said. In the international market, prices are at 19-month low and cotton import orders from China are expected to fall because of the higher duties imposed by America. China imports almost 10 lakh tonnes of cotton from the US.