Cottoncandy prices declined by 0.91% to settle at ₹52,370, driven by an upward revision in crop projections by the Cotton Association of India (CAI). The trade body increased its 2024-25 output estimate by 2 lakh bales to 304.25 lakh bales, primarily due to higher-than-expected production in Telangana, which saw a revision of 6 lakh bales. However, in North India, production is projected to decline by 3.5 lakh bales. Despite increased supply, demand remains robust, with CAI raising its consumption forecast by 2 lakh bales to 315 lakh bales for the season. The WASDE report further pressured prices by projecting a rise in global cotton production to 117.4 million bales for 2024-25, supported by higher output in India and Argentina.
Meanwhile, North Indian states—Punjab, Haryana, and Rajasthan—have seen a 43% drop in kapas arrivals until November 30 compared to last year. This has led some farmers to withhold supply, while ginners and spinners in Punjab face raw material shortages. Despite these factors, downside pressure on cotton prices remains limited due to increased cotton yarn demand from garment industries and strong export orders. As of December-end, total cotton supplies in India stood at 176.04 lakh bales, with consumption reaching 84 lakh bales and exports at 7 lakh bales.
The market is experiencing long liquidation, with open interest dropping by 18.85% to 99 contracts. Immediate support is at ₹52,170, with further downside potential to ₹51,960. Resistance is at ₹52,720, and a breakout above this level could push prices towards ₹53,060.