Cotton futures dropped by 0.53 per cent, settling at Rs. 54,140, as global cotton production for the 2024-25 season is expected to increase by over 1.2 million bales, reaching 117.4 million bales. This rise is driven by higher yields in India and Argentina. Despite this, India’s northern states—Punjab, Haryana, and Rajasthan—have reported a 43 per cent decline in kapas (unginned cotton) arrivals compared to last year, leading to supply chain challenges. Farmers are holding back stock, anticipating better prices, while ginners and spinners, particularly in Punjab, face raw material shortages.
The Cotton Association of India (CAI) estimates domestic consumption for the 2024-25 season at 313 lakh bales, with pressing estimates at 302.25 lakh bales. Meanwhile, cotton imports are projected to rise significantly to 25 lakh bales, compared to 15.20 lakh bales in the previous year.
U.S. production estimates have also increased to 14.3 million bales, contributing to the global rise. Technically, the market shows fresh selling, with open interest up 0.27 per cent to 368. Prices have fallen by Rs. 290, with support at Rs. 53,890. If breached, prices may test Rs. 53,630. Resistance is seen at Rs. 54,520, with potential gains to Rs. 54,890 in bullish scenarios.
