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The Indian cotton market in MY 2024/25 faces significant shifts, with exports expected to fall by 55% to 1.2 million 480-lb bales due to higher domestic prices outpacing global levels. This trend has led to a sharp increase in imports, forecasted at 2 million 480-lb bales, a 67% rise from earlier estimates. Declining cotton acreage, with a 9% year-on-year reduction in sowing, has compounded production challenges, though yields in southern India offset some losses. The rise in domestic consumption, driven by robust mill demand, is also curtailing export volumes. Importantly, international buyers prefer superior machine-picked cotton, adding pressure on India's export outlook.

Key Highlights

*  Cotton exports for MY 2024/25 forecasted 55% lower than prior estimates.

*  Domestic lint prices trade 4% higher than global rates.

*  Imports forecasted to rise by 67% due to affordable foreign cotton.

*  Cotton sowing area declines by 9% year-on-year in 2024/25.

*  Mill demand remains robust, driving higher domestic consumption.

India's cotton export forecast for MY 2024/25 has been slashed by 55% to 1.2 million 480-lb bales as domestic lint prices hover 4% above global averages. This price disparity has pushed international buyers toward superior-quality machine-picked cotton from other origins, particularly Australia, the U.S., and Mali. Concurrently, imports are set to surge by 67% to 2 million bales, reflecting the cost competitiveness of imported supplies compared to local cotton.

The domestic market continues to face production challenges as the planted area for cotton fell 9% year-on-year to 11.3 million hectares. Despite lower yields in northern and central India, improved productivity in the south has sustained national yields at 461 kg/ha. Moreover, robust mill consumption, estimated at 25.5 million bales, ensures strong demand within the domestic market, further limiting export volumes.

Heavy rains in southern India affected sowing schedules, forcing farmers to shift focus to alternative crops like paddy and pulses. Additionally, preliminary import data from September indicates a 240% year-on-year rise in cotton and cotton waste imports, with Australia dominating supply. On the production front, textile and apparel outputs rose 2% and 14%, respectively, in August 2024, reflecting buoyant industrial activity.

Finally

India’s cotton market navigates tight supply and heightened imports as local prices remain uncompetitive. Robust mill demand underscores limited export potential.

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