The average daily traded value of cotton on the Multi Commodity Exchange of India (MCX) hit a record ₹310 crore in March and emerged as the highest daily traded agri-commodity across exchanges.
The guarseed contract traded on the National Commodity and Derivatives Exchange (NCDEX) was the second-highest traded agriculture commodity last month, clocking an average daily turnover of ₹295 crore.
It was followed by castorseed and soyabean with an average daily turnover of ₹248 crore and ₹236 crore, respectively.
In fact, the average daily trading value of cotton on the MCX jumped 53 per cent last month from the ₹202 crore logged in March 2018.
Volatility in prices of the fibre amid expectation of lower output and strong demand has been driving investor interest in the last few months. Daily traded volumes, on an average, were up 48 per cent at 1.45 lakh bales (98,015 bales).
Warehouse stocks rise
Stock deposits at the exchange’s accredited warehouses crossed the 2-lakh-mark for the first time to touch 2.14 lakh against 1.33 lakh recorded in March last year, registering an increase of 61 per cent.
In a bid to empower cotton growing farmers in the suicide-prone Vidarbha region, MCX had set up warehouses in Arvi, Hinganghat and Wardha.
As of March 31, the stocks at these new warehouses, at 49,000 bales, accounted for 23 per cent of the total deposit across all the delivery centres in the country.
The April cotton contract on MCX was up 3 per cent at ₹21,490 per bale (of 170 kg) as of March-end from ₹20,901 logged on March 1.
Similarly, guarseed on the NCDEX was up 3 per cent at ₹4,370 a quintal, while castorseed edged down to ₹5,278.
CAI trims output estimate
The Cotton Association of India has been lowering the fibre’s output estimate every month and in its latest outlook fixed it at 321 lakh bales — 7 lakh bales lower than in its previous estimate.
This is due to the fact that some farmers have uprooted their cotton plants on about 80 per cent of the acreage without waiting for third and fourth pickings due to fears of pest attacks, said an analyst.