MCX Cotton futures closed higher last week on reports of lower than expected domestic production forecasted by the government. However, arrival of new season cotton is keeping the prices in a narrow range. As per latest data from Agricultural Ministry, the area under cotton across the country was at 122 lakh ha as on last week, up nearly 18.7% on year. Acreage was higher than the normal of 11.49 mln ha for the period, based on the average of last five years.

Outlook

Cotton futures are expected trade sideways to higher on reports of lower than expected crop size and improved exports demand for Indian. 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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