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Cottoncandy

Cotton candy prices declined by -0.53% to settle at 56,830 due to profit booking after a recent rally, which was driven by concerns over reduced acreage in the current kharif cropping season. The Cotton Association of India (CAI) reported that cotton acreage has decreased by around 9% to 110.49 lakh hectares compared to 121.24 lakh hectares during the same period last year. The total acreage is expected to be around 113 lakh hectares this year, down from 127 lakh hectares in the previous year. This shift in acreage is attributed to cotton farmers moving to other crops due to lower yields and high production costs. CAI President Atul Ganatra highlighted that the cotton balance sheet for the next year’s opening stocks will be tight, primarily due to increased exports to Bangladesh. Cotton exports from India have risen unexpectedly from 15 lakh bales to 28 lakh bales, driven by strong demand from Bangladesh. India's cotton production and consumption are both estimated at around 325 lakh bales for 2023-24, with exports at 28 lakh bales and imports at 13 lakh bales, leaving a gap that will reduce last year’s stock. Global cotton production has also been revised downward by 2.6 million bales, mainly due to lower area and production in the United States and India. World ending stocks are projected to decrease by 5 million bales from July to 77.6 million bales. Technically, the cotton candy market is experiencing long liquidation, with open interest remaining unchanged. Prices are currently supported at 56,810, with a potential test of 56,780 levels if this support is breached. On the upside, resistance is expected at 56,860, and a move above this level could see prices testing 56,880.

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