India Will Lift Cotton Export Restrictions In An All Round Way

In June 18th, India's commerce ministry official announced that all cotton export restrictions, including export volume and 3% export tariffs, should be lifted from October 1st this year. The reason for the reversal of cotton export policy is that the Ministry of textile industry hopes to create a new era of unlimited export.

At present, unofficial estimates of cotton production in India will reach a record high of 5 million 440 thousand tons in 2010/11, which will greatly increase the export supply in the new year.

In June 18th, ICE cotton futures contract prices continued to decline in December, which is inconsistent with the trend of other agricultural products prices. On the same day, corn and soybean futures prices rose. ICE cotton futures contract price rose slightly in July driven by speculative buying, which is somewhat unexpected. As the price changes, the price difference between July contract and December contract expanded from more than 100 points of the previous trading day to more than 300 points.

There are new changes in India's cotton export policy now. According to unofficial sources, the India government will lift the cotton export restrictions, including cotton export licenses, from October 1, 2010. Although this is unofficial news, the voice of the message provider is very sure.

On the same day, the India meteorological department said that although the monsoon rainfall decreased by 8% this week, it was only a temporary phenomenon and had little effect on cotton growth. In addition, Early Maturing Cotton in some parts of Pakistan has been picked and sent to the ginning plant, but the quantity of this kind of cotton is very small.

From a technical analysis, we believe that the December contract can be supported at 78.00-78.25 cents / pound, and the fall on that day has revised the overbought state. The December contract is likely to hit 80 cents / pound again next week.