Kedia Advisory - Cottoncandy prices declined by 0.54% to settle at 53,910 amid profit booking after recent gains driven by supply-side concerns. The Cotton Association of India (CAI) revised its domestic crop estimate lower by 4 lakh bales to 291.30 lakh bales for the 2024–25 season, mainly due to reduced output in Maharashtra. This downgrade from the earlier projection of 295.30 lakh bales reflects reports from state member associations as of March end. Despite the downward revision in domestic output, overall cotton supply till March—including imports—stood at 306.83 lakh bales. Imports have been significant, with 25 lakh bales arriving at ports and full-season imports now expected to surge to 33 lakh bales, more than doubling last year’s 15.20 lakh bales, driven by tighter domestic availability.
Consumption, however, remains flat, and closing stock projections for September 2025 are lower at 23.49 lakh bales, down from last year’s 30.19 lakh bales. Globally, the U.S. cotton balance sheet for 2024–25 shows minor changes, with exports down by 100,000 bales and ending stocks up by the same amount to 5.0 million bales. World cotton production has dipped slightly due to lower output in several countries, though an increase in China partly offsets this.
Technically, the market is undergoing long liquidation, with open interest falling by 16.85% to 148. Cottoncandy now finds support at 53,740, with further downside risk to 53,570. Resistance is seen at 54,140, and a break above could lead prices toward 54,370.
