Cotton dropped as CAI has revised upwards its crop projections by 2 lakh bales
By DHEERAJ GUPTA 2025-01-28 11:14:20
Cotton fell as CAI increased its harvest forecasts by two lakh bales.
Cotton candy prices fell 0.83% to ₹52,850 as the Cotton Association of India (CAI) raised crop estimates for the 2024-25 season. Estimated cotton production rose by 2 lakh bales to 304.25 lakh bales due to higher production in Telangana, where estimates rose by 6 lakh bales. However, production in North India is expected to fall by 3.5 lakh bales, down 43% from last year, due to lower arrivals of cotton. The WASDE report has also put pressure on prices, which estimated global cotton production for 2024-25 at 117.4 million bales, an increase of 1.2 million bales each due to higher production in India and Argentina. Despite pressure from higher supply estimates, the downside momentum was limited due to strong demand from the apparel industry, which has pushed up cotton yarn prices in South India. Exports are also expected to increase, which will support the demand. As of December, total supply stood at 176.04 lakh bales, including imports of 12 lakh bales and opening stocks of 30.19 lakh bales. Consumption during this period was 84 lakh bales, while exports are estimated at 7 lakh bales. December ending stocks are estimated at 85.04 lakh bales.
Long liquidation is going on in the market, with open interest declining by 29.07% to 122 contracts. Cotton candy prices are finding support at ₹52,480, below this level, it is likely to touch ₹52,110. Resistance is seen at ₹53,450, and a move above this is likely to touch ₹54,050 levels.
