In India, cotton stocks are anticipated to decline by nearly 31 percent in 2023/24, reaching their lowest level in over three decades due to reduced production and rising consumption.
Lower stockpiles are expected to constrain exports from the world’s second-largest producer, supporting global prices but potentially impacting domestic textile companies’ margins. For the marketing year 2024/25, India’s cotton production is estimated to decrease by 2 percent to 25.4 million 480 lb. bales, with a shift in acreage to higher-return crops.
However, mills consumptionin India is forecasted to increase by 2 percent, driven by improving yarn and textile demand in major international markets. Additionally, with the recension of import duty on extra-long staple (ELS) cotton, imports are expected to rise by 20 percent.
Cotton candy futures went up by 1.7 percent to close at INR58680, driven by robust demand for Indian cotton from countries like Bangladesh and Vietnam, among others despite sluggish demand by domestic mills. The International Cotton Advisory Committee (ICAC) projected increases in cotton-producing areas, production, consumption, and trade for the upcoming 2024-25 season.
Technically, the cotton candy market is experiencing fresh buying, with open interest increasing by 1.84 percent to settle at 332 contracts, while prices surged by 980 rupees. Currently, cotton candy finds support at 57920, with the potential to test 57160 if it falls below this level. On the upside, resistance is likely at 59120, with a move above potentially testing 59560. Overall, while demand remains strong, market dynamics and technical indicators will continue to shape price movements in the cotton candy futures market.
