Cotton Trading in India
Did you know that Cotton and the cotton textile industry- cultivation, spinning, weaving, and dyeing of cotton in India dates back at least 5,000 years.
The first ever derivative market in India was Cotton Futures and was set up in 1875 in Mumbai.
Currently textile manufacturing is India's second-largest industry (behind only agriculture), employing over 35 million people.
As the world's second-largest cotton producer, consumer, and exporter, India commands special global attention. India's strong economic growth over the past decade has greatly expanded the country's domestic market, leading to increased apparel spending and evolving apparel preferences among Indian consumers.
What makes Cotton good investment?Cotton is a broad commodity and employs over 35 million people, it is spread across the country and covers wide spectrum of industries of various sizes.
Though national derivatives market remains in its nascent stage in India, it is omnipresent in physical form across the country.
Kapas contract has been trading on Indian bourses actively and acted a tool of investment to some extent. MCX has recently launched a Cotton contract of the largest grown variety.
This variety has very high correlation with Global cotton prices and hence will help the exporters to hedge as well.
Why is Cotton a wise investment for an Indian trader?India is the second largest producer, consumer as well as exporter of Cotton in the world. This makes Cotton prices very vulnerable to changes in global demand and supply.
Indian exchanges have a highly liquid Kapas contracts on NCDEX, and cotton contract on MCX is in making. Active derivatives in this segment will allow Indian physical traders to actively do price risk management.
Yields that are one of the lowest in world are rapidly increasing. This will help India maintain its position as one of the top producers as well as exporters. On the other hand Indian economy remains one of the high growing economies and the fact that Cotton is largely used by the affluent class will help the domestic demand for the commodity grow at healthy pace.
Cotton globally is an important investment commodity and has equally large potential to be the one in India.
How can Kotak Commodity help me invest in Cotton?The Kotak Commodity Gateway Account will give you access to research and trading facilities to conduct cotton trading in India. While SMS alerts and Call & Trade will provide you regular updates on cotton prices in India, our expert research reports will help you make informed decisions. Our brokerage rates are attractive. The best part is that our Gateway account is a lifetime free trading account.
To learn more about Kotak Commodity Gateway Account, please click here.
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BCE/TCM/CORP/0021, BCE Trading Member Id: 545, NCDEX/TCM/CORP/0479, NCDEX Trading Member id 00155, MCX/TCM/CORP/0479, MCX Trading Member Id 10440, NCDEX Spot Trading Member Id: 10040, SEBI registration no - INZ000044135