Cotton Gains As CAI Has Estimate For The 2023-24 Season At 294.10 Lakh Bales

December 28, 2023

Category: FIBRES

Country: India

The total supply till the end of November was estimated at 92.05 lakh bales, consisting of market arrivals, imports, and opening stocks.

By Kedia Advisory
26th December, 2023 04:46

Cotton prices, represented by Cottoncandy, closed up by 0.75% at 56,120, driven by the Cotton Association of India (CAI) maintaining its pressing estimate for the 2023-24 season at 294.10 lakh bales of 170 kg each. CAI President Atul S Ganatra noted that the total supply till the end of November was estimated at 92.05 lakh bales, consisting of market arrivals, imports, and opening stocks. Reports of a decline in pink bollworm infestation in the cotton crop have provided some relief. The infestation has reduced from 30.62% during 2017-18 to 10.80% in 2022-23. However, infestation is still observed in cotton-growing areas across the country.

Certified cotton stocks, deliverable against contracts, dropped significantly from their highest level in over two years on December 1st to 6,325 bales on December 5th, according to ICE (NYSE:ICE) data. The International Cotton Advisory Committee (ICAC) projected that global cotton production is expected to outpace consumption for the second consecutive year. Global cotton lint production is forecasted to grow by 3.25% year-on-year to 25.4 million metric tons in the 2023-2024 season, while consumption is expected to marginally decline to 23.4 million metric tons. The U.S. cotton balance sheet for 2023/24 indicates slightly lower consumption but higher production and ending stocks. Global cotton balance sheets include lower consumption but higher production and stocks. Ending stocks are projected to be 3.2 million bales, accounting for 22.5% of use.

Technically, the market is under fresh buying, with a gain in open interest by 6.84% to 203. Cottoncandy is currently finding support at 55,940, with a potential testing of 55,750. On the upside, resistance is likely at 56,280, and a move above could see prices testing 56,430.

Courtesy: Investing.com/