Cotton gains as India's cotton production in 2023/24 is likely to fall 7.5%

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Cotton gains as India's cotton production in 2023/24 is likely to fall 7.5%
Credit: © Reuters.

Cottoncandy's recent price increase of 1.05% to 57500 reflects the challenges faced by India's cotton industry in the 2023/24 season. The expected 7.5% decline in cotton production to 29.5 million bales is attributed to a decrease in planted area and the impact of El Nino weather conditions on productivity. This, coupled with the forecasted increase in imports to 2.2 million bales, up from last year's 1.25 million bales, as reported by the Cotton Association of India (CAI), highlights the strain on the domestic cotton supply. The global cotton market also faces changes, with the U.S. anticipating slightly lower consumption but higher production and ending stocks. The U.S. cotton balance sheet for 2023/24 indicates increased production at 13.1 million bales, while domestic mill use is lower, leading to higher ending stocks at 3.2 million bales. 

The global scenario sees lower consumption but higher production and stocks, with India contributing to higher beginning stocks due to a production increase in the previous season. The final estimate of India's 2022-23 crop production by the CAI is slightly higher at 31.8 million bales, contrasting with the government's third advance estimate of 34.3 million bales. Regional challenges are also evident, with north Maharashtra expecting a 25% decline in cotton production due to insufficient rainfall. In Rajkot, a major spot market, cotton prices ended at 26908 Rupees, indicating a slight drop of -0.2%. 

From a technical perspective, the market shows signs of fresh buying, with a 1.94% increase in open interest, settling at 105. This, combined with a price increase of 600 rupees, indicates positive momentum. Support for Cotton candy is seen at 57500, and a move below this level could lead to a test of 57500. On the upside, resistance is expected at 57500, and a move above this level could see prices testing 57500.

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  • Parjanya Naik @Parjanya Naik
    bogus would be bigger down word production as most area r impectez by floods and imsects
    Like 0

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