India cotton futures ease on weak demand outlook, CAI cuts consumption estimate

Cottoncandy futures settled slightly lower by 0.09 per cent at Rs 54,400, reflecting cautious sentiment amid easing demand and rising stock concerns. The Cotton Association of India (CAI) marginally raised India’s production estimate to 291.35 lakh bales from 291.30 lakh bales, citing better output in Odisha. However, domestic consumption was slashed significantly by 8 lakh bales to 307 lakh bales for the 2024-25 season, underlining weak demand from the textile sector.

Exports also dipped, revised down to 15 lakh bales from the earlier estimate of 16 lakh bales. This is a sharp fall from 28.36 lakh bales exported last season, signalling low international buying interest. Imports remain steady at 33 lakh bales, with 27.5 lakh bales already arriving by April more than double last year’s levels. Consequently, India’s ending stocks are projected to rise to 32.54 lakh bales from 30.19 lakh bales, raising oversupply fears.

Globally, the USDA reported a cut of 100,000 bales in US exports and increased ending stocks to 5 million bales. Global production and consumption have softened, with textile mill demand lower in China and Indonesia.

Technically, prices are under pressure from long liquidation. Open interest dropped 5.13 per cent to 74, with key support at Rs 54,000 and resistance near Rs 54,800.