Reduced output in Maharashtra has led to the Cotton Association of India (CAI) downgrading its domestic production estimate for the 2024-25 season by 400,000 bales (each weighing 170 kg) to 29.13 million bales. This adjustment from the earlier projection of 29.53 million bales signals ongoing supply constraints.
The association estimates total cotton supply through the end of March to reach 30.683 million bales, which includes 2.5 million bales of imports and opening stocks of 3.019 million bales. As of March-end, stocks stood at 12.783 million bales, with 2.7 million bales held by mills and the remaining 10.083 million bales with the Cotton Corporation of India (CCI), Maharashtra Federation, and traders.
India's cotton imports are expected to more than double to 3.3 million bales, a significant increase from 1.52 million bales last season, amidst shrinking domestic production. Meanwhile, exports are projected to lower to 1.6 million bales, from 2.836 million bales in the previous season.
On the global front, the USDA reduced its world cotton production forecast by 69,000 bales due to lower output in Argentina and Cote d’Ivoire, despite increased production in China. Global consumption also saw a decline of 520,000 bales.
From a technical perspective, the market is experiencing short covering, with open interest decreasing by 5.82 per cent to 178. Support is identified at Rs 53,930, and a breach below this level could lead to a test of Rs 53,650.
