Cotton Prices Rise as CCI Plans to Buy Over 100 Lakh Bales at MSP
2025-02-19 14:43:47
As CCI prepares to purchase more than 100 lakh bales at MSP, cotton prices rise.
Cottoncandy prices increased by 0.41% to settle at ₹54,370, supported by expectations of significant procurement by the Cotton Corporation of India (CCI), which is likely to buy over 100 lakh bales at the Minimum Support Price (MSP) this season. The Cotton Association of India (CAI) estimates a decline in India’s cotton output for the 2024-25 season to 301.75 lakh bales from 327.45 lakh bales in 2023-24 due to lower yields in Gujarat, Punjab, and Haryana. Despite the lower output, the quality of cotton remains strong.
As of January 2025, total cotton supply is projected at 234.26 lakh bales, including 188.07 lakh bales from fresh pressings, 16 lakh bales from imports, and 30.19 lakh bales as opening stock. India's domestic consumption is retained at 315 lakh bales, while exports are projected to decline to 17 lakh bales from 28.36 lakh bales in 2023-24. Brazil's cotton production for 2024-25 is expected to rise by 1.6% to 3.76 million tons, with a 4.8% increase in the planting area, reflecting strong supply. The U.S. balance sheet shows minor changes, with domestic mill use reduced by 100,000 bales, while global cotton consumption sees marginal increases, driven by higher demand in Bangladesh, Pakistan, and Vietnam.
Technically, the market is witnessing short covering, with open interest dropping by 1.94% to 253 contracts. Cottoncandy finds support at ₹54,260, with a break below potentially testing ₹54,160. On the upside, resistance is seen at ₹54,480, and a move above this level could push prices toward ₹54,600.
