Cottoncandy prices edged up by 0.09% to settle at ₹54,420, supported by lower production estimates for the 2024-25 season. The Cotton Association of India (CAI) projected total cotton output at 301.75 lakh bales, a decline from 327.45 lakh bales in the previous season, due to reduced yields in Gujarat, Punjab, and Haryana. Despite the lower output, the quality of cotton remains strong. As of January 2025, total cotton supply was estimated at 234.26 lakh bales, including fresh pressings of 188.07 lakh bales, imports of 16 lakh bales, and an opening stock of 30.19 lakh bales.
Domestic consumption is projected at 315 lakh bales, while exports are expected to drop significantly to 17 lakh bales from 28.36 lakh bales in 2023-24. Globally, Brazil’s cotton production for 2024-25 is expected to rise by 1.6% to 3.76 million tons, with a 4.8% expansion in planting area, ensuring a strong supply outlook. Meanwhile, the U.S. cotton balance sheet saw minimal adjustments, with mill use reduced by 100,000 bales and ending stocks slightly increased. China’s cotton production saw a one-million bale increase, while consumption rose in Bangladesh, Pakistan, and Vietnam, offsetting declines in India and the U.S.
Technically, the market is under short covering, with open interest remaining unchanged at 253 contracts. Support is seen at ₹54,310, with further downside potential to ₹54,190. On the upside, resistance is likely at ₹54,540, and a breakout above this could push prices toward ₹54,650.
