Cotton prices ease by 0.17% to Rs 53,930 amid higher global production forecasts

With global cotton production for 2024-25 projected to rise by 1.2 million bales to 117.4 million bales, cotton prices have declined by 0.17 per cent to Rs 53,930. This decline is driven by higher outputs in India and Argentina.

While cotton yarn prices in India have increased due to strong demand from garment industries and robust export orders, kapas arrivals in Punjab, Haryana, and Rajasthan have plummeted by 43 per cent as of November 30 compared to last year. Farmers are reportedly holding back supplies, anticipating better prices, creating raw material shortages for ginners and spinners.

The Cotton Association of India (CAI) has maintained its consumption estimate for 2024-25 at 313 lakh bales. In the US, forecast for all-cotton production in December was revised up to 14.3 million bales. The global cotton balance sheet shows increased production, consumption, and ending stocks.

Technically, the market faces fresh selling, with open interest rising 1.17 per cent. Prices have stabilised at Rs 53,770 and Rs 53,600, while resistance is seen at Rs 54,050, with potential gains towards Rs 54,160 on a breakout.