Kedia Advisory - Cottoncandy futures fell by 0.56% to close at ₹53,300 amid long liquidation pressure, as open interest declined by 2.7% to 72 lots. The price drop reflects bearish sentiment triggered by a marginal upward revision in India’s cotton production estimates for the 2024–25 season. The Cotton Association of India (CAI) raised the output forecast to 291.35 lakh bales from 291.30 lakh bales, mainly due to improved yields in Odisha. Despite the production uptick, overall market fundamentals remain sluggish. CAI cut its domestic consumption forecast by 8 lakh bales to 307 lakh bales, suggesting weaker demand from the textile sector. Furthermore, cotton exports were lowered to 15 lakh bales, significantly down from last season’s 28.36 lakh bales, signaling waning overseas demand.
On the import front, figures remain elevated at 33 lakh bales, with 27.5 lakh already imported by April — more than double last year’s volume. Consequently, ending stocks are projected to rise to 32.54 lakh bales by September 30, 2025, compared to 30.19 lakh bales last year, reflecting a more relaxed supply situation. Globally, the U.S. cotton balance sheet showed minor adjustments: exports reduced by 100,000 bales to 10.9 million, while ending stocks were increased to 5 million bales. The world cotton outlook also saw a drop in mill use, production, and trade, while ending stocks were revised higher.
Technically, Cottoncandy finds support at ₹52,870, and a break below could drag prices to ₹52,450. Resistance is expected at ₹53,850, with potential to test ₹54,410 if momentum reverses.
