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Cotton prices experienced a marginal uptick, settling at 55240 with a 0.25% increase, driven by low-level buying. However, global dynamics have put pressure on prices, as world consumption in 2023/24 is forecasted to be 1.3 million bales lower than the previous month. Reductions in consumption are expected in key cotton-producing countries such as India, Indonesia, Pakistan, Uzbekistan, and Turkey. Additionally, world-ending stocks for 2023/24 are projected to be 2.0 million bales higher, influenced by increased beginning stocks and production coupled with lower consumption. The CAI maintained its estimates for the 2023-24 season, with domestic consumption flat at 311 lakh bales.
Pressing estimates for the season were retained at 294.10 lakh bales. The CAI’s observations are based on inputs from members and trade sources. Reports indicate a decline in pink bollworm infestation in the crop in India, reducing from 30.62% during 2017-18 to 10.80% in 2022-23. However, infestation is still observed in various cotton-growing areas across the country. The ICAC projects that global cotton production will surpass consumption for the second consecutive year. Cotton lint production is expected to grow by 3.25% year-on-year to 25.4 million metric tons in the 2023-2024 season, while consumption is forecasted to marginally decline to 23.4 million metric tons. In the major spot market of Rajkot, cotton prices ended at 26410.2 Rupees, showing a slight decrease of -0.21%.
From a technical perspective, the market is currently under short covering, with no change in open interest and prices up by 140 rupees. Cotton is finding support at 55020, and a further decline could test the 54810 levels. Resistance is anticipated at 55420, with a potential move above leading to prices testing 55610.
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