Angel Commodities’ report on Cotton
MCX June Cotton corrected and closed lower on Thursday due to mixed fundamentals. A higher stock in the country and higher expected cotton exports to China from India may increase fivefold in coming cotton season is keeping prices sideways. Cotton Advisory Board (CAB) has revised India’s ending stocks in the year started October to 43.3 lakh bales due to a fall in consumption by the mills. Recently, CAI cut its estimate for 2017 – 18 (Oct – Sep) closing stock to 16 from 21 lakh bales seen in April. Cotton acreage till last week was higher by 1.5% on year to 16.9 lakh hac, according to the farm ministry data. According to commerce ministry data, cotton exports in April is about 8.23 lakh bales, up by 86.13% on year. Exports for the season are only higher by7% at 51.21 lakh bales in cotton year 2017/18 started on October. Bangladesh (19.2 lakh bales), Pakistan (9.6 lb) and Vietnam (9 lb) are the top cotton export destination in CY 2017/18.
Cotton futures are expected trade lower on expectation of some technical corrections. Weak international prices and expectation of higher acreage of cotton due to good prices may keep prices sideways.
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