Published on December 21, 2010 12:15:00 IST
The kapas futures staged a strong rally on Monday on strong buying interest.
Last week, Indian government ex-tended deadline for export of cotton till completion of export commitment. This is attracting active buying in spot and futures market.
Steady arrivals and robust demand had a bullish effect on the market.
Outlook
The kapas futures are expected to trade on a positive note on follow through buying supported by strong fundamental factors.
The central government has extended deadline for export of cotton till completion of export commitment done so far. Earlier, in September, government lifted ban on cotton export and allowed for export of 5.5 million bales by 15th December.
But, exporters were unable to meet the obligation because of sharp rise in the cotton price.
Ease in arrival pressure in major markets will also support the prices to trade higher.
According to Cotton Association of India, cotton production in India would be 34.75 million bales of 170 kg each against previous estimate of 35.7 million tons. The decline in output is due to untimely rains in key producing areas.
Courtesy: Karvy Commtrade Ltd.
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