Cotton candy gains 0.02% on supply concerns, CAI ups crop forecast

Cotton candy prices edged up 0.02 per cent to Rs 53,600, supported by global supply concerns and revised production forecasts. Brazil’s 2024-25 cotton output projection was cut to 3.79 million tonnes from 3.83 million tonnes due to reduced acreage in Mato Grosso.

Meanwhile, the Cotton Association of India (CAI) raised its 2024-25 crop estimate by 2 lakh bales to 304.25 lakh bales, driven by better yields in Telangana, which saw a 6 lakh bale increase.

The WASDE report projected a rise in global cotton production to 117.4 million bales, mainly due to higher output in India and Argentina. However, a 43 per cent drop in kapas arrivals in North India by November 30, 2024, along with supply shortages and strategic stockholding, has tightened availability. Despite these factors, cotton prices remain supported by rising cotton yarn prices in South India, fueled by strong demand from garment manufacturers and robust export orders.

Technically, fresh buying is evident, with open interest rising 1.95 per cent to 261 contracts. Key support is at Rs 53,510, with further downside at Rs 53,430. Resistance is at Rs 53,660, and a break above this could push prices toward Rs 53,730.