MCX cotton traded in a narrow range last week and gain a little to close at 22,190 rupees per bale due to steady demand and reports of higher imports. In April, cotton prices increased to highest levels in 2019 but slipped due to forecast of near normal monsoon and expectation of higher sowing in the next season. India 2019/20 cotton output to increase about 7% yr/yr to hit five-year high of 6.4 mt on higher yields, acreage, according to USDA attaché report. Moreover, India is losing cotton export market to Brazil due to higher prices and stronger rupees. CAI trims cotton crop size to 321 lakh bales for 2018/19 season, lowest since 2009-10 which will increase imports and decline exports.
Outlook
Cotton futures expected to trade sideways to lower tracking weakness in International cotton prices and reports of higher production expected next year. Moreover, forecast of near normal monsoon, improving in imports and decreasing exports may be bearish for prices.
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Source: Moneycontrol
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