USDA Sees India`s 2025-26 Cotton Output Flat by Amit Gupta, Kedia Advisory
The USDA has projected India’s 2025-26 cotton output at 31.4 million bales (170 kg each), unchanged despite lower acreage as higher yields offset the decline. Farmers in central India shifted to crops like paddy and maize, while favorable monsoons lifted productivity. Cotton consumption is forecast at 25.7 million bales, supported by strong export demand and steady apparel growth. Higher MSP and elevated domestic prices are pushing mills toward imports. Regional trends vary—North India records higher sowing, Central India faces acreage declines, and South India shows expansion. Exports of yarn, fabric, and garments remain robust amid competitive pricing.
Key Highlights
* USDA projects India’s 2025-26 cotton output at 31.4 million bales.
* Consumption forecast higher at 25.7 million bales on strong demand.
* Elevated domestic prices prompt mills to boost cotton imports.
* Sowing trends diverge: higher in North and South, lower in Central India.
* Exports of yarn, fabric, and garments rise amid rupee depreciation.
India’s cotton sector faces a balanced outlook for 2025-26 as the USDA’s Mumbai office has projected output at 31.4 million bales (170 kg each), unchanged from last year. Despite acreage dropping to 11.2 million hectares from 11.5 million hectares, higher yields at 476 kg per hectare—supported by favorable monsoons—are expected to offset the decline.
Prices remain firm with domestic lint quoted 5–6 cents above the Cotlook A-Index, making imports more attractive. The recent 8% hike in Minimum Support Price (MSP) for medium- and long-staple cotton has further supported domestic fiber rates. Mills, operating at nearly 90% utilization, are focusing on meeting robust export demand for yarn, fabric, and apparel, while refraining from stocking beyond immediate needs due to elevated prices.
Trade performance continues to shine. Between April and June, garment exports grew 9%, yarn shipments rose 8% above the five-year average, and fabric exports surged 19%. A softer rupee and marginal decline in yarn prices have boosted competitiveness, especially in key markets like Bangladesh, China, and Vietnam.
Regionally, North India reported higher sowing—Punjab up 20% and Rajasthan 27%—while Haryana saw acreage fall by 16% due to pest issues and costs. In Central India, acreage slipped 9% overall, with declines in Gujarat, Madhya Pradesh, and Maharashtra amid excessive rainfall and infestation risks. South India, however, posted an 8% expansion, led by Karnataka and Telangana.
In conclusion, India’s cotton outlook remains steady, with strong export momentum offsetting acreage losses. Elevated prices and shifting sowing trends will shape the market’s performance in the coming season.
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