Cotton rose as sowing in India dropped by 2.11% to 122.99 lakh hectares

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Cotton rose as sowing in India dropped by 2.11% to 122.99 lakh hectares
Credit: © Reuters.

Cotton candy recorded a modest increase of 0.16%, settling at 61,500, primarily due to a decline in sowing in India, which dropped by 2.11% to 122.99 lakh hectares from 125.64 lakh hectares in 2022. This reduction in sowing has contributed to a tightening of supplies in the domestic market. Reports of lower acreages and the firmness in ICE (NYSE: ICE ) cotton prices are further supporting market sentiment. 

Concerns have arisen due to extended dry conditions in Gujarat, leading to worries about yield losses that could drive cotton prices up in the near term. Cotton arrivals during the current season, which began in October last year, have crossed 318 lakh bales, according to data from the Cotton Corporation of India. Arrivals in Punjab have been notably lower, with only around one-third of the previous year's volume. This is reflected in the arrival of cotton in Punjab for the 2022-23 marketing season, which has been recorded at 8.7 lakh quintals to date, compared to 28.89 lakh quintals for the entire 2021-22 season. India is experiencing its lowest monsoon rains in eight years, with El Niño weather conditions expected to reduce September precipitation. 

From a technical standpoint, the market is experiencing fresh buying interest, with a 1.19% increase in open interest, settling at 85 contracts, accompanied by a price increase of 100 rupees. Cottoncandy is currently finding support at 61,220, with the potential for testing at 60,930 if this level is breached. On the upside, resistance is anticipated at 61,900, and surpassing it could lead to testing 62,290. 

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