Driven by a bearish outlook from the US Department of Agriculture's (USDA), the World Agricultural Supply and Demand Estimates (WASDE) report projects a significant increase in global cotton production and ending stocks for the 2024-25 crop year.

As per the report, global cotton production is forecast to rise by 1.2 million bales to 117.4 million bales, primarily fueled by larger harvests in India and Argentina. However, a sharp 43 per cent decline in raw cotton (kapas) arrivals in North India through November 30 has created a raw material crunch for ginners and spinners. The Cotton Association of India (CAI) estimates domestic cotton consumption for 2024-25 at 313 lakh bales, with pressing estimates remaining unchanged at 302.25 lakh bales.

India's cotton imports are expected to rise by 9.8 lakh bales to 25 lakh bales. By November 30, approximately 9 lakh bales had already arrived at Indian ports. Ending stocks for 2024-25 are projected to decline to 26.44 lakh bales from 30.19 lakh bales last year.

Globally, the December estimate for US all-cotton production was revised upward to 14.3 million bales, while world production increased to 117.4 million bales. World consumption is projected to rise by 570,000 bales, led by increased demand in India, Pakistan, and Vietnam, offsetting a decline in Chinese consumption. Global cotton exports are expected to increase slightly, with notable growth in Brazil, Benin, and Cameroon.