Cotton futures on Multi-commodity Exchange are likely extend fall for fifth straight trading week on subdued demand from bulk consumers and increased sowing prospects, analysts said.
"Poor response from global markets will pressurise the prices of cotton," said Sudha Acharya, research analyst with Kotak Commodities.
India's total export estimate was lowered to 7 million bales as compared to previous estimates of 9 million bales on weak demand from China. China is the biggest cotton importer from India.
Domestic mills are also buying only according to their immediate requirement as most of the mills are not able to buy huge quantity due to their poor financial condition.
Also, the USDA trimmed India's exports for 2015-16 to 4.70 million bales as compared to previous forecast of 5 million bales.
The yarn demand from India continues to be low. Also, there has been a good drop in the exports of Yarn in India.
In June 2015, according to China customs data textile and apparel exports fell 8.79% to $233.92 billion.
Cotton prices may also be under pressure on increasing sowing prospects in the country, analysts said.
Total area planted so far under cotton is higher by 30% as compared to previous year as per Ministry of Agriculture.
Around 9.95 million hectare land was sown under cotton against the 7.61 million hectare of land which was sown under cotton during same period in last year.
Global
"Better sowing for coming season is likely to boost the cotton output in India which may negatively affect the cotton futures in coming days," said Aurobindo Gayan, research analyst with Kotak Commodities.
Meanwhile, cotton export to China from India has declined by 56.72% in 2014-15, which has caused cotton prices in domestic market to fall drastically.
In 2014-15 India exported only 2.6 million bales of cotton to China against 6.1 million bales in 2013-14.
Citing the situation, Commerce and Industry Minister Nirmala Sitharaman said in the written reply to Rajya Sabha that due to this reason cotton domestic prices are ruling weaker as compared to the previous year and cotton policy adopted by China is the major cause for less imports.
Moreover, India is likely to sell its cotton to Thailand too, after succeeding in selling cotton to Bangladesh.
One of the biggest mills in Thailand has shown interest in buying cotton from India.
According to the CCI officials, samples of cotton from India have approved and CCI is all set to get buyers from Thailand, besides Bangladesh.
From global front, total sales of upland cotton was recorded to 91,500 RB during last week ended on Jul 16, up by 79% from the previous week and 64% from the prior four-week average.
Increases were reported for Vietnam (50,800 RB, including 3,400 RB switched from Japan and decreases of 100 RB), South Korea (13,400 RB), Turkey (13,000 RB), and China (8,200 RB, including 4,400 RB switched from Vietnam and decreases of 300 RB).
Global cotton prices for October delivery fell by 2.08% to 63.42 cents per pound for the week ended Jul 31.
Cotton is expected to find support at Rs 15,500 and resistance at Rs 16,350 per bale next week, analysts said.
Cotton for October delivery traded in Rs 15,970-16,170 per bale range in the past five trading session on Multi-Commodity Exchange
No comments:
Post a Comment