Cotton prices dip 0.91% as CAI raises crop estimate

Cotton prices have declined by 0.91 per cent to settle at Rs 52,370, pressured by an upward revision in India's cotton production estimates. The Cotton Association of India (CAI) increased its 2024-25 output forecast by 2 lakh bales to 304.25 lakh bales, driven by a 6 lakh bale increase in Telangana’s production. However, North India is expected to see a 3.5 lakh bale decline.

Despite higher supply, demand remains strong, with CAI raising its consumption estimate by 2 lakh bales to 315 lakh bales. Global factors also weighed on prices, as the WASDE report projected a rise in global cotton output to 117.4 million bales, led by India and Argentina.

Meanwhile, kapas arrivals in Punjab, Haryana, and Rajasthan dropped 43 per cent until November 30, prompting some farmers to hold back supply. Ginners and spinners in Punjab face raw material shortages, but strong cotton yarn demand and export orders are limiting price declines.

India’s total cotton supply stood at 176.04 lakh bales by December-end, with consumption at 84 lakh bales and exports at 7 lakh bales. The market saw long liquidation, with open interest falling 18.85 per cent to 99 contracts. Support is at Rs 52,170, while resistance is at Rs 52,720.