Cotton futures on MCX closed higher for the second session on speculative buying after tracking International prices. Prices surged on MCX despite higher supplies this season through imports and good stocks available with the farmers. According to trade sources, India’s cotton imports have touched an all-time high of 30 lakh bales this season. USDA forecasts India cotton production for 2017/18 at 6.01 mt, up nearly 6% while area is forecast at 11.5 mhac, up 10% from last year. The domestic cotton arrivals in April are higher by 49% on year at 2.64 lakh tonnes (lt) compared to 1.77 it last year.

Outlook

Cotton futures are expected trade sideways to higher tracking firm international prices and good physical demand. However, reports of higher stock levels, normal monsoon and anticipation of higher sowing acreage in the country may pressurize prices. Moreover, lower exports prospects and higher imports keeping prices under pressure.

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