Yesterday, cotton candy prices settled up by 0.44% at 56980 due to a significant decline in cotton acreage in Punjab, Haryana, and Rajasthan, which collectively reported only 10.23 lakh hectares under cotton, a stark drop from last year's 16 lakh hectares. Punjab saw a dramatic decrease to 97,000 hectares compared to the normal 7.58 lakh hectares in the 1980s and 1990s. In Rajasthan, the area under cotton fell from 8.35 lakh hectares last year to 4.75 lakh hectares this year, while Haryana saw a reduction from 5.75 lakh hectares to 4.50 lakh hectares in 2024. Support for cotton prices also came from delayed shipments from the US and Brazil, which triggered demand for Indian cotton from neighbouring mills. Additionally, firm cottonseed prices have bolstered natural fibre prices even as sowing for the kharif 2024 season has begun in Karnataka, Telangana, and Andhra Pradesh due to the onset of monsoon rains.
The trade expects an increase in cotton acreage in Telangana as some chilli farmers shift to cotton due to weak spice crop prices. The 2024/25 U.S. cotton projections show higher beginning and ending stocks compared to last month, with projected production, domestic use, and exports remaining unchanged. The season-average upland farm price is down 4 cents from the May forecast to 70 cents per pound, resulting in ending stocks being 400,000 bales higher at 4.1 million, or 28% of use. Globally, the 2024/25 cotton balance sheet projects higher beginning stocks, production, and consumption, with world trade unchanged.
Technically, the market is under fresh buying with a 0.6% increase in open interest to settle at 167 while prices rose by 250 rupees. Cotton candy is currently supported at 56980, with resistance likely at 56980, and a move above this level could see prices testing 56980.