Cottoncandy fell by 0.24% to ₹53,700, pressured by increased crop projections by the Cotton Association of India (CAI) and the USDA’s WASDE report, which forecast higher global production and ending stocks for 2024-25. CAI raised India’s cotton production estimates by 2 lakh bales to 304.25 lakh bales, mainly due to a 6 lakh bales increase in Telangana’s output. Meanwhile, North India’s production is expected to decline by 3.5 lakh bales, while cotton arrivals in Punjab, Haryana, and Rajasthan are down 43% year-on-year, causing supply concerns. Global factors also weighed on sentiment, with Brazil’s 2024-25 cotton forecast revised down to 3.79 million tonnes due to lower acreage in Mato Grosso.
The USDA projects global production to increase by 1.2 million bales to 117.4 million bales, driven by higher production in India and Argentina. However, strong demand from South Indian garment industries and export orders is limiting the downside. India’s cotton consumption for 2024-25 has been revised up by 2 lakh bales to 315 lakh bales, reflecting strong demand from textile industries. As of January 22, cumulative market arrivals stood at over 156 lakh bales, surpassing half of the estimated crop size. In Rajkot’s spot market, cotton prices declined 0.18% to ₹25,224.9 per bale.
Technically, the market is under fresh selling, with open interest rising 0.39% to 260 contracts. Support is seen at ₹53,700, with a further test possible at the same level, while resistance is at ₹53,700, and a breakout could push prices towards ₹53,700.
