Cotton prices fell 0.5% to ₹53,920 despite the Cotton Association of India (CAI) cutting its crop estimate. The decline came despite weak buying sentiment and profit-taking by investors. CAI has cut its 2024-25 cotton production estimate by 4 lakh bales to 291.30 lakh bales, mainly due to lower production in Maharashtra. Cotton imports are expected to more than double to 33 lakh bales as domestic supply is very tight.
Despite the decline in cotton production, domestic consumption is flat, which is slowing down the price hike. Prices have not risen much as mills are not in a rush to buy more as they have adequate stock. By the end of the season, remaining cotton stocks are expected to come down to 23.49 lakh bales, from 30.19 lakh bales last year. As of end-March, total cotton supply, including remaining stocks and imports, was 306.83 lakh bales. Furthermore, cotton trade and mill utilization, particularly in China and Indonesia, have declined, reflecting the weakening global demand.
