India cotton prices up despite production dip

Cotton candy prices (likely a reference to actual cotton) fell 0.76 per cent to settle at Rs 57,120 per unit. This decline comes despite positive factors like a surge in export sales (up 79 per cent compared to last week) driven by key buyers like Bangladesh and Vietnam.

However, optimism is tempered by expectations of a strong cotton harvest in countries like Australia, which could increase supply and put downward pressure on prices. Additionally, India's cotton stocks are predicted to hit a three decade low due to lower production and rising consumption.

Looking forward, experts forecast a decrease in India's cotton production for the current season, but also an increase in consumption and exports. Mill consumption is also expected to rise as demand for textiles improves globally. China is likewise projected to import more cotton due to rising demand for textiles and apparel.

Technically, the cotton market saw increased selling, with open interest rising slightly. Despite the price drop, support exists at Rs 57,000, with potential downside testing at Rs 56,880. Conversely, resistance is expected at Rs 57,320, with a break potentially leading to a test of Rs 57,520.