MUMBAI, March 11 (Reuters) - Cotton prices in India, the
world's second-largest producer, are likely to fall this week
with traders reluctant to buy at higher prices while demand to
release the stocks procured by government agencies could also
add to the drop.
Fresh import deals signed by Indian buyers, mainly from West
Africa, to retain their competitive edge at a time when
stockbuilding and thin spot supplies have pushed domestic prices
higher, are also seen weighing on the sentiment.
India's cotton imports could jump by two-thirds to over 2
million bales in 2012/13, a top official said on Mar. 8.
Manikam Ramaswami, TEXPROCIL chairman, said that around
20,000 tonnes of raw cotton had been contracted from Africa
during the last 30 days.
The March cotton futures contract on the Multi
Commodity Exchange (MCX) ended 1.28 percent down at 18,500
rupees per bale of 170 kg each.
"Cotton prices are seen taking correction this week due to a
slowdown in demand at higher prices. The March contract seen
falling to 18,300 rupees," said Chowda Reddy, a senior analyst
at JRG Wealth Management.
In New York, the most active May contract on the
Intercontinental Exchange was down 0.89 percent at 86.11 cents
per lb at 1234 GMT.
The U.S. government on Friday cut its forecast of global
cotton inventory for the marketing year to end-July due to
expectations of higher demand as China, home to the world's No.
1 textile industry, continues to bulk up its strategic stockpile
Currently, cotton supplies to spot markets across the
country are around 100,000 bales per day, down from 200,000
bales per day at the start of February, according to traders.
India has allowed 8 million bales of exports for the year to
Sept. 30, 2013, of which trader estimated around 6-6.5 million
bales to have already been shipped. There have been rumours last
week that India might introduce an export ban.
(Reporting by Meenakshi Sharma; Editing by Bijoy Koyitty)