CottonCandy settled 0.54% higher at ₹53,780, supported by India’s upward crop revision and firm demand from garment industries. The Cotton Association of India (CAI) increased its 2024-25 cotton production estimate by 2 lakh bales to 304.25 lakh bales due to higher output in Telangana (+6 lakh bales). However, North Indian production is expected to decline by 3.5 lakh bales, with Punjab, Haryana, and Rajasthan witnessing a 43% drop in kapas arrivals by November-end.
Despite increased supply, demand remains robust, as cotton yarn prices in South India are rising due to strong export orders and higher consumption estimates of 315 lakh bales. On the global front, Brazil’s 2024-25 cotton production forecast was revised down to 3.79 million tonnes from 3.83 million tonnes due to reduced acreage in Mato Grosso. The WASDE report projects global cotton production to rise by 1.2 million bales to 117.4 million bales, driven by higher output in India and Argentina. Meanwhile, India’s December-end stocks stood at 85.04 lakh bales, while exports were estimated at 7 lakh bales, reflecting stable overseas demand.
Technically, the market is under short covering, with open interest remaining unchanged at 268 lots. Support is seen at ₹53,780, with a break below testing ₹53,780 again. On the upside, resistance is at ₹53,780, and a move above this level could drive prices towards ₹53,780.