Benchmark cotton variety S6 (Gujarat) is quoting at Rs 20,800 per bale of 170 kg each. At this price Indian cotton has completely lost the export competitiveness, and the import parity has set in for the mills in North. Farmers resistance to sell at lower levels will be met with the absence of demand. While lower crop and government buying at minimum support price (MSP) is supportive but possibility of imports could result in prices going lower. Expect cotton prices to dip to Rs 19,700 or lower per bale in the next couple of weeks.
Soybean prices in Indore are trading at Rs 3,492 per quintal. Prices are expected to trade higher towards Rs 3,550 per quintal in the next couple of weeks following active buying by processors and likely decline in farm arrivals after completion of flat bhavantar (difference between MSP and marketing prices) in Madhya Pradesh which will end by January 10, 2019.
Prerana Desai, VP-Research -Edelweiss Agri Services and Credit, Edelweiss Agri Value Chain