Cottoncandy prices slipped by 0.22% to settle at ₹54,360 amid weak demand in yarn markets and payment constraints. India's cotton production for 2024/25 is projected to decline by 7.4% to 30.2 million bales due to reduced acreage and crop damage from excessive rainfall. Similarly, USDA has revised India's cotton production forecast to 30.72 million bales, reducing ending stocks to 12.38 million bales. Meanwhile, global production estimates rose by over 200,000 bales, driven by increased output in China, Brazil, and Argentina, despite reductions in the U.S. and Spain. India's cotton acreage has dropped by 9% this year, falling to 11.29 million hectares from 12.69 million hectares a year earlier.
Farmers in Gujarat, a key cotton-producing state, shifted focus to groundnuts for better returns. Reduced domestic production will likely increase imports to 2.5 million bales, up from 1.75 million bales last year, while exports are expected to decline to 1.8 million bales from 2.85 million. On the global front, U.S. cotton production was cut by 300,000 bales to 14.2 million due to hurricane damage, while mill use and exports were also reduced. However, global ending stocks for 2024/25 were slightly reduced to 76.3 million bales due to lower Chinese imports.
The market is under long liquidation, as open interest dropped by 9.29% to 127 contracts. Prices are supported at ₹53,600, with further downside potential to ₹52,840. Resistance is seen at ₹54,910, and a breakout above could test ₹55,460.
Trading Ideas:
# Cottoncandy trading range for the day is 52840-55460.
# Cotton dropped as yarn markets face weak demand and payment constraints.
# India's cotton production in 2024/25 is likely to fall by 7.4% from a year ago to 30.2 million bales.
# Cotton production is projected to increase in China, Brazil, and Argentina, more than offsetting reductions in the US and Spain – USDA
# In Rajkot, a major spot market, the price ended at 25791.35 Rupees dropped by -0.19 percent.