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COTTON

Cotton yesterday settled up by 0.69% at 24820 supported as the cotton crop in Bathinda and Mansa districts of Punjab has been infected with a pest called pink bollworm for the second consecutive year. CAI demand for withdrawal of 10 per cent customs duty on cotton imports. Trade body Cotton Association of India (CAI) has expressed concerns of India losing its competitiveness to China, Pakistan and Bangladesh in the international market. With 10 per cent customs duty on cotton varieties including extra-long staple (ELS), the export-oriented garments and cotton-madeups become costlier thereby giving an edge to the close competitors. The 10 per cent customs duty was imposed on cotton imports on February 2, 2021. The CAI has written a letter to the Union Finance Minister Nirmala Sitharaman seeking the withdrawal of duty. In the letter, Atul Ganatra, President, CAI, said that India produced merely 5-6 lakh bales (each of 170 kg) of ELS variety of cotton as against the local requirement of about 12 to 15 lakh bales of ELS and about 5-7 lakh bales of non ELS contamination-free sustainable cotton. The daily arrivals have stopped, as farmers and stockists have less stock. Meanwhile, mill owners and exporters are hoping to restore their supplies for the next two-three months, while the new crop is more than three months away. In spot market, Cotton dropped by -130 Rupees to end at 24660 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -1.01% to settled at 6833 while prices up 170 rupees, now Cotton is getting support at 24600 and below same could see a test of 24390 levels, and resistance is now likely to be seen at 24930, a move above could see prices testing 25050

Trading Idea for the day

Cotton trading range for the day is 24390-25050.

Cotton prices remained supported as pink bollworm infests cotton crop Bathinda, Mansa

CAI has reduced the crop size by 4 lakh bales (each of 170 kg) to 356 lakh bales.

CAI demand for withdrawal of 10 per cent customs duty on cotton imports.

COCUDAKL

Cocudakl yesterday settled up by 0.74% at 2862 as the tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand. Support seen as falling arrival numbers of raw cotton due to the lean supply season and thin stocks lying with ginners and farmers has resulted in supply crunch in the market. However upside seen limited after new restrictions in Maharashtra due to rise in Delta variant of corana virus. The demand and supply balance sheet for cotton is indicative of prices to remain firm in coming months. The USDA in its latest report has pegged global ending stocks in 2021/22 down 1.7 million bales to 89.3 million versus 2020/21. Global consumption estimate for is also higher for 2021/22, up 1.1 million bales year on year. World trade on the other hand is estimated 1.1 million bales higher, considering better import possibilities from China, Bangladesh, and Turkey. The industry remains optimistic demand for Indian cotton products to improve in near term from the global economic rebound. The CAI has kept its consumption estimate for the current crop year at 330 lakh bale in the previous month. Last season's consumption was 250 million bales due to disruptions caused by the Covid-19 epidemic. This indicates that there can be a reduction in the carryover stocks year on year because of increase in the consumption level. In Akola spot market, Cocudakl dropped by -5.4 Rupees to end at 2917.5 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -3.14% to settled at 64560 while prices up 21 rupees, now Cocudakl is getting support at 2828 and below same could see a test of 2795 levels, and resistance is now likely to be seen at 2890, a move above could see prices testing 2919.

Trading Idea for the day

Cocudakl trading range for the day is 2795-2919.

Cocudakl gained as the tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand.

Support seen as falling arrival numbers of raw cotton due to the lean supply season and thin stocks resulted in supply crunch in the market.

However upside seen limited after new restrictions in Maharashtra due to rise in Delta variant of corana virus

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