For the marketing year MY 2024/25, India's cotton production is predicted to decrease by 2 per cent as farmers shift acreage to other crops offering better returns. Conversely, mill consumption is forecasted to rise by 2 per cent, driven by improved demand for yarn and textiles in major international markets.
China's cotton imports for MY 2024/25 are expected to increase to 2.4 million metric tons (MMT) due to heightened domestic and international demand for textile and apparel products. Similarly, while production is projected to remain steady in Xinjiang, it's expected to decline in other regions.
Cotton candy prices edged up by 0.1 per cent to reach 59920, mainly fueled by short covering following a previous dip in prices due to expectations of improved crop conditions, particularly in countries like Australia. The International Cotton Advisory Committee (ICAC) anticipated growth across various metrics for the upcoming 2024-25 season, including expansion in cotton-producing areas, production, consumption, and trade. Despite these positive outlooks, ICE (NYSE: ICE) prices dropped due to expected higher supply and decreased demand from mills. In India, both the Cotton Association of India (CAI) and the Cotton Corporation of India (CCI) revised their cotton production estimates upward for the current season, signaling robust growth in production.
The cotton candy market experienced short covering, with a decrease in open interest by -0.95 per cent, indicating a temporary alleviation of bearish sentiment.
Despite a modest price increase of Rs 60, support levels are identified at 59760, with potential testing of 59610 levels if breached. Conversely, resistance is anticipated at 60100, with a move above potentially leading to testing the 60290 levels.
