Cotton yesterday settled up by 1.23% at 23070 after CAI has revised higher Indian cotton export estimates for 2020-21 season at 65 lakh bales against 60 lakh bales projected till last month. Cotton production in Haryana is expected to decline by 27 percent to 1.8 million bales in the 2020-21 (July-June) season due to yield loss. India’s cotton output in the 2020-21 (October-September) market year is seen at 38 million bales, up 4 percent on the year. The country’s cotton exports are likely to be 20 percent higher at 1.02 million tonnes in 2020-21 (October-September) backed by competitive pricing in the global markets and an improvement in international cotton consumption, said Care Rating.

Higher exports along with a recovery in domestic cotton demand will help reduce the surplus availability of cotton in the nation despite higher supply, the rating agency said in a note. Cotton farmers from various states are planning to increase the area under cultivation in the coming 2021-22 Kharif season. Indian textile mills have reduced production due to lower domestic demand and labour shortage. The government has allowed mills to operate but markets are closed so mills are facing a cash crunch. Textiles mills dealing in exports are still going strong as Indian yarn prices are attractive. In the spot market, Cotton gained by 150 Rupees to end at 22970 Rupees.

Technically market is under fresh buying as the market has witnessed a gain in open interest by 0.5% to settled at 7100 while prices up 280 rupees, now Cotton is getting support at 22830 and below same could see a test of 22580 levels, and resistance is now likely to be seen at 23240, a move above could see prices testing 23400.