Cotton Association of India Reduces Cotton Output Forecast Due to Crop Damage in Haryana

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Cotton Association of India Reduces Cotton Output Forecast Due to Crop Damage in Haryana
Credit: © Reuters.

Summary

The Cotton Association of India (CAI) has revised down its cotton production estimate for the current season to 294.10 lakh bales, citing damage in Haryana caused by pink bollworm infestation and farmers uprooting plants. The total supply for October 2023 is estimated at 54.74 lakh bales, with a reduction of one lakh bales in production. Despite this, CAI maintains consumption projection at 311 lakh bales, exports at 14 lakh bales, and imports at 22 lakh bales. Production in northern India is down, particularly in Upper Rajasthan, while central India faces challenges due to adverse weather conditions. Southern India sees varying output, with a notable increase in Tamil Nadu (NS: TNNP ).

Highlights

The reduction in cotton production forecast by CAI reflects the challenges faced by Indian cotton farmers, particularly in Haryana, due to the pink bollworm infestation and uprooting of plants. These issues have led to a decrease of one lakh bales in the overall estimate. The committee, led by CAI president Atul S Ganatra, emphasizes its vigilance on pressing numbers, suggesting possible adjustments in future reports based on subsequent developments.

Northern India, comprising Punjab, Haryana, and Rajasthan, witnesses a decline in production, especially in Upper Rajasthan. Conversely, central India, including Gujarat, Maharashtra, and Madhya Pradesh, faces challenges due to unfavorable weather conditions impacting the crop. In southern India, variations in output are observed, with Tamil Nadu showing a notable increase while Telangana, Andhra Pradesh, and Karnataka experience a decrease.

Despite these challenges, the cotton market on MCX has seen a surprising drop of nearly -1.95% in the last month. Technical analysis indicates a trend of long liquidation, with support at 56200. The market's resistance is anticipated at 57350, with potential for prices to test 55650 if support levels are breached.

# CAI revises down cotton production estimate to 294.10 lakh bales

# One lakh bales reduction attributed to crop damage in Haryana.

# Total supply for October 2023 estimated at 54.74 lakh bales.

# Consumption projection retained at 311 lakh bales.

# Exports estimate maintained at 14 lakh bales; imports outlook at 22 lakh bales.

# Production decline in northern India, with Upper Rajasthan facing a seven lakh bales reduction.

# Central India's output projected at 175.65 lakh bales, impacted by adverse weather.

# Southern India sees varying output, with an increase in Tamil Nadu.

# CAI committee closely monitors pressing numbers for potential adjustments.

# Cotton candy prices on MCX drop nearly -1.95% in the last month.

# Technical analysis suggests long liquidation on MCX.

# Support for Cottoncandy at 56200; potential test of 55650 if breached.

# Resistance anticipated at 57350, with a possible rise to 58100.

# Market dynamics influenced by weather conditions and global demand.

# Traders advised to monitor support and resistance levels for market trends.

Conclusion

In conclusion, despite the adverse conditions affecting cotton production in India, the unexpected drop in cotton candy prices on MCX indicates complex market dynamics. While the fundamentals suggest a potential bearish trend, technical analysis points to support at 56200 and resistance at 57350. Traders and stakeholders should closely monitor these levels as a breach could influence prices to test 55650 or rise to 58100. The market's response in the coming months will depend on factors such as weather conditions, global demand, and the effectiveness of pest control measures.

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