Cotton Dropped While Weak Yarn Demand Persisted As A Concern for Sluggish Milling Demand

A weak milling demand amid dampened yarn demand in the global market was the main cause of yesterday’s little fall in cotton candy, which saw a closing price of -0.24 % at 58,540. However, India was spared negative pressure because Bangladesh and Vietnam remained major buyers of its cotton.

The International Cotton Advisory Committee (ICAC) forecasts higher cotton output, consumption, and trade for the upcoming season, 2024–25, and the likelihood of a better harvest in nations like Australia also contributed to part of the market optimism. Cotton stocks in India are predicted to decline by around 31% in 2023–2024, to their lowest point in over thirty years due to decreased output and increased consumption.

This may affect the profit margins of regional textile businesses, restrict exports from India, and maintain world pricing. Looking ahead, farmers are expected to move acreage to higher-return crops, which would result in a minor decline in India’s cotton production for the marketing year 2024–2025. Meanwhile, mill consumption is expected to rise as yarn and textile demand rises in major foreign markets.

A surge in imports is anticipated after the recent announcement of a review of import duties on extra-long staple (ELS) cotton. The increased demand for textile and apparel items both domestically and internationally is likely to drive up China’s cotton imports in MY 2024–2025. Production is predicted to fall in other regions but stay stable in Xinjiang.

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