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Cotton candy surged by 2.44%, closing at 61400, driven by multiple factors. Sowing in India decreased by 2.11% to 122.99 lakh hectares compared to 125.64 lakh hectares in 2022. This decline in sowing, combined with shrinking supplies in the domestic market, provided support to prices. Additionally, firmness in ICE (NYSE:) cotton prices and concerns over yield losses due to extended dryness in Gujarat contributed to the bullish sentiment in the cotton market.
Reports of lower acreages and the overall supply situation have bolstered market sentiment. Cotton arrivals during the current season, which began in October last year, have crossed 318 lakh bales, as reported by the Cotton Corporation of India. Punjab, a significant cotton-producing region, recorded arrivals at nearly one-third of the previous year, with only 8.7 lakh quintals so far in 2022-23, compared to 28.89 lakh quintals for the entire 2021-22 season. However, it’s essential to note that India is facing its lowest monsoon rains in eight years, with El Niño weather conditions expected to reduce September precipitation.
From a technical perspective, the cotton candy market is currently experiencing fresh buying interest, marked by a substantial 23.53% increase in open interest to settle at 84. This surge in open interest aligns with a price increase of 1460 rupees. Key technical levels provide guidance for potential price movements. Cotton candy finds support at 60440, with the possibility of a test of 59490 if this level is breached. On the upside, resistance is anticipated at 62120, and a move above this level could lead to prices testing 62850.
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