Cotton prices to trade sideways to higher: Angel Commodities

November 17
12:05 2017

Angel Commodities’ report on Cotton

MCX Cotton Nov futures  is trading in a range on mixed  fundamentals of higher arrivals  and  reports of damage to cotton  crops in Vidarbha and start of procurement by CCI in Gujarat at  higher prices. Moreover, govt. imposed 5% GST under reverse charge mechanism (RCM).  The notification says that the GST on supply of raw cotton by farmers will be liable to be paid by the buyers – traders & ginners under the RCM,  which makes cotton  procurement expensive for them.

Cotton futures are expected trade sideways to higher as CCI has already start its procurement in main cotton growing states. They have a target to procure 100 lakh bales this season. Good demand for kapas may also support cotton prices. However, due to implementation of GST for raw cotton, traders and ginners may go on strike which may put pressure in cotton prices.

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