Cottoncandy declined by 0.21% to ₹53,490 due to an upward revision in crop estimates by the Cotton Association of India (CAI). The association increased 2024-25 cotton output estimates by 2 lakh bales to 304.25 lakh bales following higher-than-expected production in Telangana, which rose by 6 lakh bales to 42 lakh bales. However, North India saw a 3.5 lakh bales decline in production. Additionally, global cotton production for 2024-25 is projected to rise by 1.2 million bales to 117.4 million bales, led by India and Argentina. Brazil’s cotton forecast was lowered to 3.79 million tonnes due to a decline in acreage in Mato Grosso.
Cotton arrivals in Punjab, Haryana, and Rajasthan have declined 43% year-on-year till November 30, causing supply concerns. Farmers are holding back stock, anticipating higher prices, while ginners and spinners face raw material shortages. Cotton yarn prices in South India have increased due to rising garment industry demand and strong export orders, providing some price support. CAI also revised domestic consumption higher by 2 lakh bales to 315 lakh bales, reflecting stronger demand. As of January 22, market arrivals stood at 156 lakh bales, surpassing half of the projected 304.25 lakh bales crop size.
Technically, fresh selling is observed as open interest increased by 2.68% to 268 contracts. Support is at ₹53,270, with a break below potentially testing ₹53,050. Resistance is at ₹53,740, and a move above this could push prices toward ₹53,990.