Kapas or raw cotton futures settled 2 per cent higher on Monday following short-covering. The lower output estimates for the 2012-13 season from the Agriculture Ministry too boosted prices. But the harvesting in key States and new crop arrivals may cap gains, feel analysts.

February contracts on the NCDEX gained 2 per cent to Rs 879 for a maund of 20 kg. The March series slipped 1 per cent to Rs 865, while the April series gained 2 per cent to Rs 917.5/maund.

In the spot market at Surendranagar (Gujarat), kapas was quoted at Rs 799.4 a maund.

On the other hand, lint cotton on the Multi Commodity Exchange was mixed with short-term October contracts gaining marginally at Rs 16,060 a bale of 170 kg (16,050), while December contracts remaining unchanged at Rs 15,880. November contracts dropped marginally to Rs 15,840 (Rs 15,850), while cotton for January delivery dropped over one per cent to Rs 16,150 (Rs 16,360) as also February to Rs 16,250 (Rs 16,500).

As on September 21, cotton had been planted on 114 lakh hectares, down from last year’s 119.6 lakh hectares.

According to the latest updates of the Cotton Advisory Board (CAB), production for 2011-12 is revised upward to 357 lakh bales (of 170 kg each) compared with 347 lakh bales estimated earlier. Also, on account of the cheaper cotton available in the global markets, imports have more than doubled to 12 lakh bales.

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.

Global scenario: ICE cotton futures closed 1.26 per cent lower and continued its bearish rally ahead of a pick-up in cotton crop harvesting in the US. Cotton harvesting has commenced in the US with a 43 per cent good crop condition, according to USDA.

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