The Hindu Business Line : Jute Dec contracts likely to move up

Mumbai, Nov 25 After recovering from its recent fall, jute futures for November delivery on MCX may trade with a downward bias, while the December contract may move up in the short to medium term.

According to the Government estimates, output of raw jute may increase to 104.13 lakh bales (of 180 kg) this year against 102.80 lakh bales last year.

Arrivals are expected to remain high till November-end, which may keep prices lower.

“However, in the long term sentiments are bullish due to strong buying from stockiest.

Currently prices of TD-4 varieties quoting about Rs 1250 per quintal in Kolkata.

"Prices are likely to come down by another Rs 50-60 in spot markets in short term due to higher arrivals,” said Mr Sushil Sinha, regional head, Karvy Commodities.

Versatile crop

Jute is among the least expensive and most versatile of textile annual fibre crop.

It is the most important cash crop, industrial raw material and the biggest foreign exchange-earner for India and Bangladesh. Jute grows in any tropical climate.

However, a hot and humid climate along with moderate rainfall is the essential for jute cultivation. Generally, sowing takes place between February and April depending on the location, condition of the land, nature of the soil and amount of rainfall.

Harvest takes place in June –September.

Harvesting 120 days after sowing gives best fibre quality and yield.

After a decline towards Rs 1,295 per quintal, the November contract has retraced much of its losses to settle at Rs 1,314 per quintal.

The December contracts are quoting much higher at Rs 1,390, indicating that the prices may firm up once the arrivals dry down, he said.

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