Cotton prices yesterday decreased by -0.59% to 57500 as farmers who had been hanging onto their crop in anticipation of a return to record-high prices from the previous year have begun to sell their harvest. From the historical average of 20,000 bales per day in May, the daily arrival of cotton in the markets has surged fivefold to 100,000 bales (each weighing 170 kg).
According to a major trade organization, India’s cotton exports are expected to reach their lowest level in 18 years in 2022–2023 after production fell short of local demand for the second straight year. Lower exports from the largest producer on the planet might keep prices stable. Additionally, it might increase domestic costs and hurt the profits of regional textile businesses.
The Cotton Association of India (CAI) warned in a statement that exports could drop below 2 million bales in the current marketing year that ends on September 30—the lowest level since 2004/05 and much below the 4.3 million bales exported the previous year. According to the CAI, production could decrease from the earlier prediction of 30.3 million bales to 29.84 million bales.
Technically, the market is in long liquidation as the open interest dropped by -0.22% to close at 445 while prices fell by -340 rupees. Cotton is now receiving support at 57080, and a move below that level could result in a test of 56670 levels. Resistance is now expected to be seen at 57840, and a move above could result in prices testing 58190.