Despite remaining stable during earlier forecasts, India's cotton production is projected to remain lowest in five years during the marketing year (MY) 2024/25 at 25 million 480-pound bales.
Driven by a reduced cultivation area of 11.8 million hectare, cotton production in the country is projected to decline despite improvement in yields to the highest levels in four years to 461 kg per hectare.
Over the past month, domestic ex-gin cotton prices have fallen by 9 per cent to 82 cents per pound, compounded by a 4 per cent dip in the Cotlook-A Index. Slow domestic demand, subdued export prospects, and lower international prices are pressuring farmgate prices, prompting many farmers to phase their market arrivals. To stabilise the market, the Indian government has ramped up procurement under the Minimum Support Price (MSP) program, purchasing 176,000 bales so far.
At the same time, global price competitiveness has spurred a notable increase in cotton imports, particularly from Australia and the United States. Shipments increased by 479 per cent in Oct’25 Y-o-Y in value, reflecting shifting trade dynamics and a preference for high-quality imports.
However, the textile industry continues to demonstrate resilience amid these challenges. Cotton-based yarn and garment exports have grown by 7 per cent and 35 per cent, respectively, signaling robust international demand. Yet, the sector faces headwinds domestically, with declining apparel production and higher input costs limiting mill consumption, which is forecasted at 25.5 million bales.
Looking ahead, the upcoming Bharat Tex event in February 2025 aims to spotlight the sector's adaptability and growth potential. While India’s cotton sector grapples with reduced production and subdued prices, government interventions and export opportunities are poised to offer critical support during this challenging period.
