Cotton candy prices saw a little increase of 0.07%, ultimately settling at 57240. This increase was mostly driven by the Cotton Association of India’s (CAI) revised downward projection of cotton production for the current 2023–2024 season. Concerns about decreased cotton output were exacerbated by the revision, which mentioned damage in Haryana caused by pink bollworm infestation and farmers uprooting plants. In addition, low rainfall in north Maharashtra is expected to cause a major 25% drop in cotton production.
The USDA’s World Agricultural Supply and Demand Estimates report from November, which increased global ending inventories and predicted higher U.S. production in 2023–2024, adding to the dynamics of the market. Market sentiment was impacted by the U.S. cotton balance sheet, which revealed somewhat lower demand but stronger production and ending stocks.
A small increase from its earlier predictions, 31.8 million bales was the final estimate of crop production for the 2022–2023 season provided by the CAI. In comparison, the industry output estimate for the 2021–22 season is 29.9 million bales, while the government’s third advance estimate for the season is 34.3 million bales. A 25% decrease in cotton production is anticipated in north Maharashtra, where the average yearly production is around 20 lakh tons, as a result of insufficient rainfall.
The worries about the cotton supply outlook that are more general are exacerbated by this regional element. In terms of technical analysis, the market is seeing short covering, as open interest stays at 152 and prices rise by 40 rupees. Cotton candy finds support at 57020, and a test of 56810 might result from a breach below. Prices could reach 57690 if they move above the expected resistance level of 57460.
