MCX Cotton futures closed higher last week as the demand for new season cotton keeping the prices higher. As per CAI, cotton market is beginning to show signs of pressure as there is going to be a lot of cotton the world over. In spite of reports of losses due to recent hurricanes in the US cotton belt, the size of the US crop is expected to be larger. Indian acreage for the current season (October 2017-September 2018) is expected to jump by about 12% compared to last year.

According to the first advance estimates for 2017-18 released by the government, India's 2017-18 (Jul-Jun) cotton output is pegged at 322.7 lakh bales (1 bale = 170 kg), down 2.5% from 330.9 lakh bales in 2016-17.

Outlook

Cotton futures are expected trade sideways to higher on reports of lower than expected crop size, cci procurement and improved exports demand for Indian cotton. However, expectation of good production and carryover stocks for the next season may keep domestic prices steady during the arrival seasons.

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