Mon Jun 10, 2013 - Cotton prices in India are expected to trade higher this week due to a decline in spot supplies and good demand from millers, while concerns over lower acreage and firm global prices are also seen supporting prices. Domestic cotton supplies have declined as the season has ended and farmers are busy with planting. The sowing of cotton has begun and it will pick up pace with the spread of monsoon rains, traders said. India's monsoon recorded higher than average levels in the first week of the four-month season, weather office sources said on June 6, reflecting a timely onset and progress so far over the southern states. "Cotton is seen extending gains due to concerns over lower acreage.
Farmers in Maharashtra and Rajasthan are seen shifting to soybean and guar for better returns," said Chowda Reddy, a senior analyst at JRG Wealth Management. The local currency hit a record low on Monday. The weakness in the Indian rupee has made Indian cotton, as well as cotton yarn, competitive in the global market. The Indian rupee is at an all-time low, making cotton and cotton yarn exports competitive, while firm global prices are also supporting the natural fibre futures in India, Kotak Commodities said in a research note on Monday.
The June cotton futures contract ended 1.37 percent up at 19,220 rupees per bale of 170 kg each on the Multi Commodity Exchange. Sales from government reserves, however, were seen weighing on the sentiment.
The Cotton Corporation of India (CCI) had offered to auction 58,200 bales on Monday, according to a notification on its website. In New York, the most active July contract on the Intercontinental Exchange was up 0.04 percent to 84.89 cents per lb at 1325 GMT. China, the world's largest cotton importer, is looking at changing its aggressive stockpiling policy which traders say has distorted prices and supplies. (Source: Reuters)