Cotton prices to remain steady

Cotton prices are likely to remain steady with a positive bias in the week ahead amid moderate demand from exporters and stable arrivals, traders and analysts said.

"Currently export demand is moderate, not as high as it was two weeks ago," said Poonamchand Agarwal, president, MP Cotton Brokers Association. 

Cotton prices in rupees per candy (one candy = 356 kg)
Variety	Price	*Change
Mar-03	17.60	17.43
Mar-04	17.30	16.76
Mar-05	16.98	16.33
Mar-06	16.09	15.88
Mar-07	14.91	15.55
Jun-07	15.25	15.64
*Change over a week

Domestic demand from ginners is good but buying interest from textile mills is slightly weak, said a Rajkot-based trader.

On Thursday, cotton arrivals in Gujarat were 30,000-32,000 bales (1 bale=170 kg) and are likely to be steady in the week ahead, said Jatin Bhindora, a trader based in Rajkot.

Daily cotton arrivals in north India, including Punjab, Haryana and Ganganagar, are also expected to be stable at 8,000-8,500 bales, said Raghbir Chand, secretary, North India Cotton Association.

Last week, all varieties of cotton fell as textile mills were not ready to buy at very high prices, traders said.

However, in the long run, prices are seen firm as arrivals are likely to slow down amid firm demand from exporters, said Manubhai Shah, director, East India Cotton Association.

"Demand from China, Bangladesh and Indonesia is likely to be firm in the next two months," said Shah.

Cotton futures on the National Commodity and Derivatives Exchange are also seen sideways with a positive bias tracking the trend in spot market, said a Delhi-based research analyst.

April Kapas V-797 contract may get support at Rs 525 per 20 kg and face resistance at Rs 545 in the week ahead, the analyst said.

On Thursday, Kapas V-797 futures on NCDEX were down on selling by speculators.