Cotton prices touch Rs 54,370 amid strong CCI procurement outlook

Cotton prices climbed 0.41 per cent to settle at Rs 54,370, driven by expectations that the Cotton Corporation of India (CCI) will procure over 100 lakh bales at the Minimum Support Price (MSP) this season. The Cotton Association of India (CAI) projects India’s cotton output will decline to 301.75 lakh bales in 2024-25 from 327.45 lakh bales in the previous season due to lower yields in Gujarat, Punjab, and Haryana. However, cotton quality remains strong.

As of January 2025, India’s total cotton supply stands at 234.26 lakh bales, comprising 188.07 lakh bales from fresh pressings, 16 lakh bales from imports, and 30.19 lakh bales as opening stock. Domestic consumption remains steady at 315 lakh bales, while exports are expected to drop to 17 lakh bales from 28.36 lakh bales in 2023-24.

Global trends show Brazil’s cotton production rising 1.6 per cent to 3.76 million tons, with a 4.8 per cent expansion in planting area. US domestic mill use fell slightly, while demand strengthened in Bangladesh, Pakistan, and Vietnam.

Technically, short covering is observed, with open interest down 1.94 per cent to 253 contracts. Key support is at Rs 54,260, while resistance is seen at Rs 54,480, with potential gains toward Rs 54,600.