Cotton yesterday settled down by -0.43% at 36870 on profit booking after update industry seeks removal of import duty on cotton in Budget 2022-23. In recent sessions, prices rallied amid the low cotton yield this season due to excessive rain and the pink bollworm attack has resulted in the crop selling at over 60 per cent higher than the minimum support price (MSP). An official of the Cotton Corporation of India (CCI), said unseasonal rains in September last year followed by pink bollworm attack had not only hit the yield but also affected the crop’s quality.
Overseas demand for cotton candy or ginned cotton and cotton yarn is robust, contributing to an all-time high price for the commodity. In the current season, cotton acreage in Gujarat stood at 22.53 lakh hectares in the Kharif season 2021-22 as against 22.78 lakh hectares in the previous season, with an average of 25.53 lakh hectares recorded over the previous three years. As per the Gujarat government’s First Advanced Estimate (FAE), cotton production in Gujarat at 80.95 lakh bales, each containing 170 kg of seed-cotton, is almost as normal as last year’s. Higher demand and lower output could bring down stockpiles at the end of the current season to 4.5 million bales from 7.5 million bales a year ago, Atul Ganatra, president of the CAI, said. In spot market, Cotton gained by 220 Rupees to end at 36550 Rupees.
Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.05% to settled at 6536 while prices down -160 rupees, now Cotton is getting support at 36630 and below same could see a test of 36390 levels, and resistance is now likely to be seen at 37040, a move above could see prices testing 37210.
Trading Ideas:
# Cotton trading range for the day is 36390-37210.
# Cotton prices dropped on profit booking after update industry seeks removal of import duty on cotton in Budget 2022-23.
# Unseasonal rains in September last year followed by pink bollworm attack had not only hit the yield but also affected the crop’s quality.
# Overseas demand for cotton candy or ginned cotton and cotton yarn is robust, contributing to an all-time high price for the commodity.
# In spot market, Cotton gained by 220 Rupees to end at 36550 Rupees.