Cotton Output Expected to Drop by 7% Amid Acreage Reduction by Amit Gupta, Kedia Advisory
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India's cotton production is projected to decline by 7% to 302 lakh bales in the 2024-25 season due to a reduction in acreages and adverse weather conditions. The Cotton Association of India (CAI) attributes this drop to a shift in crop preferences in key regions like Gujarat and Maharashtra. The projected cotton consumption remains stable at 313 lakh bales, while exports are expected to fall by 37% to 18 lakh bales due to reduced availability. Imports, on the other hand, are anticipated to rise by 43%, reaching 25 lakh bales. The closing stocks are forecasted to decline slightly by September 2025.
Key Highlights
# Cotton production is expected to decrease by 7% to 302 lakh bales.
# Acreage has declined by 14 lakh hectares due to crop shifts.
# Cotton exports are set to drop by 37% to 18 lakh bales.
# Imports are likely to rise by 43%, reaching 25 lakh bales.
# Closing stocks are forecasted at 26.44 lakh bales by September 2025.
India's cotton prices are expected to witness upward pressure as the country's production is projected to decline by 7% in the 2024-25 season, reaching 302 lakh bales compared to last year’s 325.29 lakh bales. This drop is primarily driven by a significant reduction in acreage as farmers in major cotton-growing regions such as Gujarat, Maharashtra, and Madhya Pradesh shift to other crops like groundnut and pulses, resulting in a 14 lakh hectare drop in cultivation. This acreage shift has been coupled with adverse weather conditions impacting yields, further tightening supply.
Supporting these price projections, the Cotton Association of India (CAI) reports that while domestic consumption will likely remain steady at 313 lakh bales, reduced availability has led to a sharp decline in exports, down 37% to 18 lakh bales. This contraction in the global cotton trade will likely support higher prices domestically. Meanwhile, cotton imports are expected to surge by 43%, with a forecast of 25 lakh bales to meet local demand.
In other news, total cotton supply is projected at 357.44 lakh bales by the end of the 2024-25 season, while closing stocks are anticipated to decline to 26.44 lakh bales, down from last year’s 30.19 lakh bales. This further supports the outlook for tightening supply and firming prices.
Finally
Cotton prices are expected to remain firm as lower production, decreased exports, and rising imports weigh on the market.
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