Cotton Candy prices fell by -0.85% to ₹54,900, reflecting weak demand in the yarn market and payment constraints. India's cotton production for 2024/25 is expected to decline by 7.4% year-on-year to 30.2 million bales, primarily due to reduced planted area and crop damage from excessive rainfall and pests. The USDA revised India's cotton production estimate to 30.72 million bales, with ending stocks cut to 12.38 million bales. Acreage under cotton fell by approximately 9% to 11.29 million hectares from 12.69 million hectares last year, with farmers in Gujarat shifting to groundnuts for better returns.
The Cotton Association of India (CAI) forecasts a rise in India’s cotton imports to 2.5 million bales in 2024/25, up from 1.75 million bales the previous year, while exports are expected to decline to 1.8 million bales from 2.85 million bales. This shift is likely to support global cotton prices due to reduced export availability from the world's second-largest producer. Globally, the USDA projected a 200,000-bale increase in cotton production for 2024/25, driven by higher output in China, Brazil, and Argentina, offsetting declines in the U.S. and Spain. Global trade is expected to decrease by over 500,000 bales due to lower Chinese imports, with ending stocks slightly reduced to 76.3 million bales.
Technically, the market is under long liquidation, with open interest unchanged at 161 contracts as prices fell by ₹470. Cotton Candy has support at ₹54,900, and a break below this level could see prices test further lows. Resistance is expected at ₹54,900, with a move above potentially testing higher levels. Weak domestic production and rising import dependency are key factors influencing price trends.