MUMBAI, May 27 (Reuters) - Cotton prices in India are
expected to remain range-bound this week due to a pick-up in
yarn demand, though sowing in some irrigated areas and sales
from government reserves are seen capping the gains.
Sowing of cotton has begun in irrigated areas of Punjab and
Haryana while in non-irrigated areas planting would commence by
mid-June, traders said.
"So far cotton sowing is good in Punjab and Haryana but
major operations would start with the onset of monsoon. At some
places cotton may have competition from guar seed," said Manu
Mangaldas Shah, a trader from Ahmedabad, Gujarat.
Timely arrival of the monsoon, which is forecast to be
average in 2013, could also weigh on sentiment.
The June cotton futures contract ended 0.6 percent
up at 18,370 rupees per bale of 170 kg each on the Multi
Demand for yarn from local buyers and exporters has
increased and is expected to stay firm in coming days, traders
and analysts said.
A pick-up in sales from the Cotton Corp of India (CCI) is
expected to keep the fibre under pressure.
"CCI has sold actively last week. Improvement in sales from
government reserves is likely to restrict any sharp upside in
prices," said Prerana Desai, vice-president of research at
CCI had offered 38,100 bales to be sold through on e-auction
on Monday, a notification on its website showed.
India has started selling cotton from government-controlled
stocks as it tries to protect domestic textile mills from costly
imports, but traders said sales have so far been limited because
of high prices.
In New York, the most active July contract on the
Intercontinental Exchange was down 0.31 percent at 81.53 cents
Forward sales of this year's U.S. cotton crop slowed to a
trickle this month as growers either worried about a deepening
drought or maintained hopes that prices would recover from their
(Reporting by Meenakshi Sharma; Editing by Sunil Nair)