India's cotton consumption is expected to remain flat at 311 lakh bales for the 2023-24 season, according to the Cotton Association of India (CAI). However, CAI's total cotton supply projections remain at 345 lakh bales, suggesting a potential supply-demand imbalance.
Globally, despite a historic high in Brazil's cotton production, sluggish demand due to economic headwinds has led to oversupply and lower prices. However, a positive sign for India is the reported decline in pink bollworm infestation, a major cotton pest.
Technically, the cotton market is seeing renewed buying interest, with open interest rising 7.8 per cent. Cottoncandy has support at 57,240, with a potential test of 56,630 if breached. Resistance is expected at 58,220, a break above which could see prices reach 58,590.
In summary, cotton prices are on the rise due to a combination of supply and demand factors. While India's consumption is expected to remain stable, global oversupply concerns persist. However, positive developments like reduced pest infestation offer hope for the Indian cotton industry.
