Cotton prices to trade sideways to higher: Angel Commodities

Angel Commodities' report on Cotton

MCX cotton jumps more than 2% last week tracking reports of export demand coming from China. In a recent development, Indian traders have signed contracts to ship 800,000 bales of cotton to China as demand surged from the world's biggest consumer due to a rally in prices in China. India has already shipped around 600,000 bales to China so far in the 2018/19 marketing year that started on Oct. 1. Cotton prices have improved since last one month on reports of lower production. In 2018/19, production of Cotton is estimated at 300.9 l- bales(of 170 kg each), down about 7.4% compared to previous estimate of 324 l-bales as per latest government advance estimates.

Outlook

Cotton futures expected to trade sideways to higher due improving in exports demand from China. Moreover, increasing domestic demand and procurement by CCI also support prices. However, reports of CCI likely to start selling its stock may keep prices in a range.

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