Cotton yesterday settled up by 0.04% at 25170 on slow sowing and higher demand from mills - Kedia Advisory
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COTTON
Cotton yesterday settled up by 0.04% at 25170 on slow sowing and higher demand from mills. 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. In spot market, Cotton gained by 130 Rupees to end at 25230 Rupees.
Technically market is under short covering as market has witnessed drop in open interest by -8.32% to settled at 5013 while prices up 10 rupees, now Cotton is getting support at 25080 and below same could see a test of 24990 levels, and resistance is now likely to be seen at 25270, a move above could see prices testing 25370.
Trading Idea for the day
Cotton trading range for the day is 24990-25370.
Cotton prices gained on slow sowing and higher demand from mills.
The cotton crop in 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.
COCUDAKL
Cocudakl yesterday settled down by -1.77% at 2774 on profit booking after prices gained as there is a possibility of damage to the crops which have been sown due to less rain for the next several days. 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.
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. In Akola spot market, Cocudakl gained by 4.55 Rupees to end at 2919.3 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -7.71% to settled at 50660 while prices down - 50 rupees, now Cocudakl is getting support at 2748 and below same could see a test of 2722 levels, and resistance is now likely to be seen at 2813, a move above could see prices testing 2852.
Trading Idea for the day
Cocudakl trading range for the day is 2722-2852.
Cocudakl dropped on profit booking after prices gained the tight supply situation in cottonseed is expected to continue
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.
Support seen amid falling arrival numbers of raw cotton due to the lean supply season and thin stocks
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