Cotton futures double on MCX during Dec-Feb on coronavirus scare

Cotton futures contracts on the Multi Commodity Exchange (MCX) nearly doubled in the December 2019-February 2020 period, as the coronavirus outbreak in China has spread some panic among traders and industry, according to the exchange and traders. China leads the world in cotton production, followed by India and the US, and any disruption in production and supply from China is bound to send prices spinning out of hand, said traders.

Both volume and value of cotton futures contracts traded on the MCX nearly doubled between December 2019 and February 2020.

While the volume stood at 6.67 lakh bales as on December 31, or worth Rs 1,286.51 crore, the same spiked to 12.28 lakh bales valued at Rs 2,344 crore as of February 29, according to the exchange data.

However, this is a tad lower than the January volume when it stood at 13.27 lakh bales or Rs 2,621.16 crore. Traders and the MCX attributed the fall to stockpiling by the industry ahead of the long new year holidays in China in February, which though was a washout this year due to the epidemic that has so far killed over 3,100 people in that country alone and over 400 across 105 other countries.

Source: Money Control

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