Due to strong demand from China and Turkey and unseasonal rains in America, there is a strong rise in the price of cotton. The price on CBOT has reached the high of 2011. On the other hand, cotton has crossed 28,500 for the first time on MCX. What to do in cotton after such a boom? Will the uptrend continue or further pressure can be seen.
Why cotton boom?
For the first time on MCX, the price of cotton has crossed 28,500. The price of cotton on CBOT has reached the high of 2011. Actually there are many reasons for the boom in cotton. Unseasonal rains have affected crops in America. US cotton exports are at a 15-year high. At the same time, there is a possibility of delay in new arrivals in the domestic market as well. New arrivals have been delayed due to rains in Maharashtra, Gujarat. Crops have been damaged by Pink Bollworm disease in North India. There has been an increase in the demand for cotton yarn from China, Turkey.
Talking about the returns of cotton on MCX, cotton has given 5 percent in 1 week, 12 percent in 1 month, 16 percent in 3 months and 58 percent in 1 year.
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Along with cotton, there is a bullish trend in other agri commodities. Edible oils and spices are witnessing great growth due to strong demand during the festival. Guar is also witnessing a jump of about 4%.
Meanwhile, talking about non-agri commodities, there is a boil in crude due to no decision on increasing production in OPEC+ meeting. The price of Brent has reached near $82. Crude is close to 7-year high. Prices are getting support from a sharp recovery in the global economy.
The strength of the dollar is showing pressure on gold and silver. The price on Comex has reached near $ 1750. Silver is also working with a sluggishness. Silver has slipped below 61,000 on MCX.
All base metals except aluminium are showing weakness. Prices remain under pressure due to China power crisis. Copper is seeing a decline of more than one and a half percent on LME. Weakness is also visible in nickel and zinc.
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