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Cotton production could drop 8%

New Delhi.Cotton prices, represented as Cottoncandy, ticked up 0.07% to settle at 56420. The Cotton Association of India maintained its production forecast for the 2023-24 season at 294.10 lakh bales, citing input from state groups and traders. Total supply through November was estimated at 92.05 lakh bales, including arrivals, imports, and opening stocks.

Pink bollworm infestation reports show a decline from 30.62% in 2017-18 to 10.80% in 2022-23. Certified cotton stocks for delivery plunged from 87,770 bales on December 1st to 6,325 bales on December 5th. Although Brazilian cotton exports rose in November, they decreased slightly year-over-year.

The International Cotton Advisory Committee projects a global cotton surplus for the second straight year, with 2023-24 production growing 3.25% to 25.4 million metric tons while consumption marginally drops to 23.4 million. Slowing demand, reflected in a 5-week low for global bookings, has weighed on cotton futures. In the U.S., 2023/24 forecasts show lower consumption but higher production and carryout. Technically, fresh buying is emerging with a 2.56% open interest increase to 200. Despite a 40 rupee price rise, Cottoncandy found support at 56240, with potential downside testing of 56050. Resistance is expected at 56580, and a break higher could target 56730.

Mandibhav