By admin       2016-09-26

Cotton complex closed lower on Friday on profit booking as new season cotton arriving in the physical market. NCDEX Kapas for Apr’17 closed 1.98% down while MCX Oct’16 cotton closed down by 2.88%. India, which was the largest producer of cotton in 2014-15, has seen the crop stock dwindle, leading to competition between exporters and the textile industry, which has been forced to import at the end of the season. India’s exports will be at their lowest level since 2008/09 falling 30 % or 1.9 million bales in 2015-16. Domestic update As per latest estimate by government, cotton is planted in 105.6 lh in the country, down by 11.6% against 116 lh last year as on 23 Sep. In Gujarat, the top cotton producing state, the crop had been across 23.8 lh ,down 13.8% from a year ago. In Maharashtra, the largest area under cotton, the acreage was at 38.0 lh, slightly down from around 38.2 lh a year ago. According to USDA, cotton production in the country expected at sevenyear low in 2016-17 of 5.8 mt due to lower area under cultivation and pest attacks in top producer states. Global Cotton Updates Cotton futures slid by over two percent on Friday as traders booked profits after a four-day rally amid fading concerns of damage to crops from rain in the West Texas region. Dry weather is forecast in the Delta region for the next 10 days and that should help harvesting and aid quality of the crop. Thus weather in the U.S. is not a big a threat to the crop as was projected earlier. Outlook We expect cotton prices may trade down as market is expecting new season crop in few week. There is forecast of better weather across cotton sowing states Gujarat and Maharashtra. Moreover, lower cotton in International market may also pressurize prices.

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