Cotton Drops While Weak Yarn Demand Is Concerning Sluggish Milling Demand

The price of cotton candy fell somewhat, by -0.1%, to settle at 57360. This was mostly caused by a slowdown in the demand for milling amid a downturn in the demand for yarn on the international market. Expectations of a better crop in nations like Australia added to the pressure on prices. The drawback was minimal because there was still a strong market for Indian cotton in countries like Bangladesh and Vietnam, among others.

For the upcoming season, 2024–2025, the International Cotton Advisory Committee (ICAC) has predicted increases in the area used to produce cotton, as well as in output, consumption, and trade. Notably, due to decreased output and rising consumption, cotton inventories in India are predicted to decline by around 31% in 2023–2024, reaching their lowest level in more than three decades.

The second-largest producer in the world, India, will have fewer exports as a result of the stockpile reduction, supporting global prices. India is predicted to produce two percent less cotton in the marketing year 2024–2025, with farmers shifting their acreage to higher-yielding crops.

However, as the demand for yarn and textiles recovers in significant foreign markets, mill consumption is expected to rise by two percent. Furthermore, imports are expected to rise by 20% following the recent review of import duties on extra-long staple (ELS) cotton.

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