Cotton stocks in the country declined -0.43 per cent at 36870 on profit booking after removal of import duty on cotton was sought by the industry in Budget 2022-23. In recent sessions, cotton prices had surged amid the low cotton yield this season due to excessive rains and the pink bollworm attack that resulted in the crop selling at over 60 per cent higher than the minimum support price (MSP). As per the Cotton Corporation of India (CCI), unseasonal rains in September last year followed by pink bollworm attack affected the crop’s quality and yield.

In the current season, cotton acreage in Gujarat increased to 22.53 lakh hectares in the Kharif season 2021-22 as against 22.78 lakh hectares in the previous season. Atul Ganatra, President, CAI, believes, higher demand and lower output could bring down stockpiles at the end of the current season to 4.5 million bales from 7.5 million bales a year ago.

Currently, the market has witnessed a drop in open interest by -2.05 per cent to settle at 6536 while prices down -160 rupees, now cotton is getting support at 36630 and below same could see a test of 36390 levels, and resistance is now likely to be seen at 37040, a move above could see prices testing 37210.