KEDIA ADVISORY | COMMODITIES
24-04-2025,
Cottoncandy futures edged up by 0.15% to ₹55,110, supported by profit booking after a recent rally driven by expectations of a tighter domestic supply outlook. The Cotton Association of India (CAI) has revised its 2024–25 domestic crop estimate downward by 4 lakh bales to 291.30 lakh bales (170 kg each), citing lower production in Maharashtra.
Total cotton supply until the end of March, including imports and opening stocks, is estimated at 306.83 lakh bales, with imports alone contributing 25 lakh bales. The domestic stockpile by March end stood at 127.83 lakh bales, with the majority held by government and trade entities.
However, export demand has weakened, with CAI pegging 2024–25 season exports at just 16 lakh bales—significantly lower than last year’s 28.36 lakh bales. This soft export outlook is further balanced by a surge in imports, now expected to more than double to 33 lakh bales for the season, indicating an increasing reliance on foreign supply amidst domestic shortfall. On the global front, the U.S. cotton balance sheet showed minimal changes, with a minor reduction in exports and a corresponding increase in ending stocks.
Globally, cotton production and consumption have been revised downward, while stocks are slightly up, reflecting subdued demand from key consumers like China and Indonesia.
Technically, the market is under short covering, with a marginal 0.8% drop in open interest to 249 contracts. Support is seen at ₹54,860 and ₹54,620, while resistance is placed at ₹55,410, with potential for testing ₹55,720 if bullish momentum extends. (Source: in.investing.com)