Cotton declined on substantial increase in supplies and limited mill buying .
By yash chouhan 2025-02-28 12:05:16
Cotton fell as a result of limited mill purchases and a significant increase in supplies.
Cotton candy prices fell 0.41% to 53,510 on increased supplies and weak mill buying. Mills have adequate stocks, reducing their immediate buying needs. Brazil's cotton production for 2024-25 is expected to increase by 1.6% to 3.7616 million tonnes, with a 4.8% expansion in planted area, indicating adequate global supply. Additionally, the Cotton Corporation of India (CCI) is expected to procure over 100 lakh bales at minimum support price (MSP) this season. The Cotton Association of India (CAI) estimates India's cotton production for 2024-25 to be 301.75 lakh bales, lower than 327.45 lakh bales in the previous season, mainly due to lower yields in Gujarat, Punjab and Haryana.
Total cotton supply till January 2025 was 234.26 lakh bales, which includes 188.07 lakh bales of fresh pressing, 16 lakh bales of imports and opening stock of 30.19 lakh bales. Estimated cotton consumption till January 2025 is 114 lakh bales, including exports of 8 lakh bales, while ending stock is 112.26 lakh bales. CAI maintained its domestic consumption forecast at 315 lakh bales, while export forecast for 2024-25 is 17 lakh bales, lower than last season's 28.36 lakh bales.
Technically, the market is witnessing long term liquidation, and open interest remains unchanged at 253. The prices have support at 53,200 and can likely test 52800 levels, while resistance is also at 53,860 and a move above this can take the prices towards 54200 levels.
