Lower carry-forward stocks and a potential reduction in output due to decreased cotton acreage are likely to boost India’s cotton imports during the 2024-25 crop year spanning Oct 24-Sep’25. 

Traders are also likely to benefit by the lower global prices by reducing imports between November and March, says Atul Ganatra, President, Cotton Association of India (CAI). According to him, India’s cotton imports may rise to 3.5 million bales during the year. 

In the 2023-24 season, India had imported 1.64 million bales of cotton by Aug’24-end, reflecting concerns about the expected drop in domestic crop production as sowing declined by 1.2-1.3 million hectare.

There are no carry-forward stocks from the 2023-24 season although farmers continue to hold 3 million bales of kapas or unprocessed cotton, notes Ganatra. Reduced harvest areas will to lead to a 7 per cent decline in India’s cotton production to 24 million bales of 480 pounds each during 2024-25 season as against 25.8 million bales recorded last year, adds Ganatra.  

According to the August balance sheet of CAI, by Sep’24-end India’s closing stocks had declined to 2.332 million bales from 2.89 million bales recorded in the previous year. The industry has already contracted shipments of 700,000 to 1 million bales for the Nov’24-Mar’25 period,, adds Ganatra. With an 11 per cent customs duty, the landed cost of Brazilian 28 mm cotton for delivery in Dec’24 stands at Rs 64,880 per candy, while Australian 29 mm cotton costs Rs 69,120. West African 28.7 mm cotton, which incurs a 5.5 per cent duty, is priced at Rs 63,480 for Mar’25 shipment and Apri-May delivery.

Ganatra says, it’s too early to predict the size of the 2024-25 crop due to damage from recent rains, particularly in Maharashtra and Gujarat, where the crop has been delayed by about a month. Ramanuj Das Boob, Vice President, All India Cotton Brokers Association, adds, the industry witnessed a contraction of approximately 1 million bales when ICE futures traded at 66-67 cents per pound. However, ICE futures have since risen to 72-73 cents per pound.

According to Boob, further imports will depend on how Indian cotton prices react with the arrival of new crop, In Raichur, Karnataka, daily arrivals range between 3,000-5,000 bales, with prices ranging from Rs 7,000 to Rs 7,700 per quintal. While in Adoni, Telangana, prices range from Rs 7,000 to Rs 7,400 per quintal, though high moisture content of around 10 per cent slows purchases. The minimum support price for medium staple cotton is Rs 7,121 per quintal, while for long staple is priced at Rs 7,521. Despite the lower acreage, expectations for the crop remain optimistic, although the industry expects arrivals in Gujarat, Maharashtra, and Madhya Pradesh to be delayed.