Cotton declined due to profit-taking

Prices for cotton candy saw a little decrease of -0.45%, ultimately finishing at 56960. This was ascribed to profit booking following previous gains. The Cotton Association of India (CAI) has estimated that reduced planted acres and the influence of El Niño weather conditions will cause India’s cotton production for 2023–2024 to decline by 7.5% to 29.5 million bales. In contrast to the 1.25 million bales imported the year before, import forecasts point to a possible increase to 2.2 million bales.

Although production and ending stocks are higher, consumption is marginally down on the U.S. cotton balance sheet for 2023–2024. It is observed that Texas offsets reduced production elsewhere with higher production at 13.1 million bales. With exports staying constant and domestic mill use marginally declining, ending stockpiles at 3.2 million bales are higher.

The cotton balance sheet for 2023–2024 indicates increased output and stockpiles but decreased consumption globally. A 300,000-bale increase in India’s 2022–2023 production was the main cause of the 200,000 bale increase in beginning stockpiles. The final estimate from CAI for the production of cotton in 2022–2023 is 31.8 million bales, which is marginally more than the initial projections.

This, however, is not the same as the government’s 34.3 million bale projection. Due to inadequate rainfall, it is predicted that cotton production in north Maharashtra will decrease by 25%, affecting roughly 10 lakh hectares of land. In the area, about 20 lakh tons of cotton are typically produced annually. Major spot market Rajkot saw a -0.31% decline in price, closing at 27188.4 Rupees.

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