Raw cotton or kapas futures continued their bearish run on Friday, declining nearly 3 per cent.
Kapas for February delivery on the NCDEX slipped 2.3 per cent to Rs 982 for a maund (of 20 kg) while March contracts slipped by 2.7 per cent to Rs 1,001. The fibre for April delivery was down 2 per cent at Rs 1,007.
Cotton prices have declined sharply in the last two weeks as the Cotton Advisory Board has raised the end stocks estimates. Further improved rain in August and higher imports of cheaper African cotton also aided the bearish trend. Reports of good rain in the past few days in Gujarat, the top producer of the fibre, has provided some relief.
As of August 31, cotton has been planted on 112.83 lakh hectares; lower by 4.3 per cent compared with last year. However, the acreage is at a par with the normal area of 111.8 lakh hectares. Cotton production for the 2011-12 season has been raised to 357 lakh bales of 170 kg each against 347 lakh bales estimated earlier.
On the demand front, exports increased to around 127 lakh bales from earlier estimates of 115 lakh bales. Thus, the ending stocks figure for the 2011-12 season that would end in
September has been revised upward to 28 lakh bales from previous estimates of 25 lakh bales.
In the spot market at Surendranagar, Gujarat Kapas was quoting at Rs 799.4/maund. ICE cotton futures settled 0.93 per cent higher.