Cotton Candy prices fell by 0.97% to settle at ₹54,370, weighed down by weak yarn market demand and payment constraints. India's cotton production for 2024/25 is projected to decline by 7.4% to 30.2 million bales due to reduced acreage and crop damage caused by excessive rainfall and pests. The USDA also revised India's production forecast lower to 30.72 million bales, reducing ending stocks to 12.38 million bales. Meanwhile, global production estimates were raised by over 200,000 bales, with increases in China, Brazil, and Argentina offsetting declines in the U.S. and Spain.
India's cotton acreage has dropped by 9% to 11.29 million hectares this year, as farmers in Gujarat shifted to groundnuts for better returns. Consequently, cotton imports are expected to rise to 2.5 million bales from 1.75 million last year, while exports are likely to fall to 1.8 million bales from 2.85 million. Domestic demand is projected to remain steady at 31.3 million bales. Globally, the U.S. reduced its 2024/25 cotton production estimate by 300,000 bales to 14.2 million due to hurricane damage, and exports were lowered by 300,000 bales to 11.5 million. However, world ending stocks were slightly reduced to 76.3 million bales, reflecting weaker import demand, especially from China.
Technically, the market witnessed long liquidation as open interest dropped by 1.86% to 158 contracts, with prices declining by ₹530. Support is seen at ₹54,080, and a break below could test ₹53,800. Resistance is likely at ₹54,570, with potential upside testing ₹54,780. Market sentiment remains pressured by reduced production, export constraints, and weak downstream demand.
Trading Ideas:
# Cottoncandy trading range for the day is 53800-54780.
# Cotton settled down as yarn markets face weak demand and payment constraints.
# India's cotton production estimated to drop to 7-year low in 2024-25
# USDA has lowered India's cotton production forecast for the 2024-25 season to 30.72 million bales
# In Rajkot, a major spot market, the price ended at 25814.95 Rupees dropped by -0.41 percent.