Cottoncandy futures declined by 0.51% to settle at ₹54,750 amid profit booking, following recent gains driven by tightening domestic supply expectations. The Cotton Association of India (CAI) has revised its crop estimates downward by 4 lakh bales to 291.30 lakh bales of 170 kg each, citing lower output in Maharashtra. The earlier projection stood at 295.30 lakh bales. This downgrade stems from state-level reports as of March end, reinforcing concerns about a supply squeeze for the 2024-25 season. CAI estimates total cotton supply until March at 306.83 lakh bales, factoring in imports of 25 lakh bales and opening stocks of 30.19 lakh bales. End-March stockpiles stood at 127.83 lakh bales, with 27 lakh held by mills and the balance distributed among CCI, Maharashtra Federation, and traders.
Despite the supply constraints, mill buying remains subdued due to comfortable inventory levels, capping further price upside. India’s cotton imports are forecasted to more than double to 33 lakh bales this season, up from 15.20 lakh last year, primarily due to weaker domestic output. Exports are projected to fall sharply to 16 lakh bales, down from 28.36 lakh bales in the previous season. Meanwhile, the U.S. cotton balance sheet saw minor adjustments—exports were reduced by 100,000 bales, raising ending stocks to 5 million bales.
Technically, Cottoncandy is under fresh selling pressure as open interest rose 0.8% to 251 lots while prices dropped ₹280. Immediate support lies at ₹54,520, with further downside potential to ₹54,290. Resistance is seen at ₹54,990, and a breakout above could push prices toward ₹55,230.
