Cottoncandy prices rose by 0.79% to settle at 56,050, driven by concerns over India's declining cotton production for the 2024/25 season, forecasted to fall by 7.4% to 30.2 million bales due to lower acreage and crop damage from excessive rains. The USDA revised its projection for India, lowering production to 30.72 million bales and cutting ending stocks to 12.38 million bales. Global cotton production estimates rose slightly, with increases in China, Brazil, and Argentina offsetting reductions in the U.S. and Spain. Acreage in India’s current Kharif season declined by 9%, totalling 110.49 lakh hectares compared to 121.24 lakh hectares the previous year. The reduction in planted area is mainly due to a shift toward groundnuts, particularly in Gujarat, driven by better returns.
India’s cotton exports are expected to decrease to 1.8 million bales from 2.85 million a year ago, while imports may rise to 2.5 million bales. Domestic demand is projected to remain stable at 31.3 million bales. In the U.S., cotton production was lowered by over 300,000 bales to 14.2 million due to damage from Hurricane Helene, while exports were reduced by 300,000 bales to 11.5 million in response to weaker global import demand. World trade forecasts were revised down, primarily due to a reduction in China’s imports, while global ending stocks were slightly reduced to 76.3 million bales.
Technically, the cotton candy market is in a fresh buying phase with open interest rising by 2.44% to 168 as prices gained by 440 rupees. Support is at 55,860, with further support at 55,670, while resistance is expected at 56,200, with a potential move above this level leading prices to test 56,350.