Cotton Prices Surge Amid Positive India-US Trade Talks

25-Apr-2025 04:34 PM

New York, April 2025 – Cotton prices are on the rise following positive developments in the ongoing India-US bilateral trade agreement (BTA) negotiations. On the New York Exchange, cotton futures for the most active contract jumped 3.5%, reaching the highest level of the year.

Earlier this month, cotton prices had dipped after the US President announced new tariffs on imports from several countries. However, the market has since stabilized and is now showing signs of sustained strength.

The increase in India's cotton imports from the US highlights rising domestic demand. With the possibility of US cotton exports to China slowing down due to tariffs, the US is seeking alternative markets — and India, the world’s second-largest cotton producer and consumer, appears poised to fill that gap.

The US Vice President, currently visiting India, stated that both nations are working to finalize the trade agreement by year-end. Once signed, this deal could boost American cotton exports to India.

Meanwhile, signs of a recovery in the global economy are fueling optimism about rising exports of Indian cotton yarn, fabrics, and textiles, which would further drive domestic cotton demand.

However, cotton production in India for the 2024–25 season is expected to fall below 300 lakh bales, possibly pushing imports beyond 30 lakh bales, despite an 11% import duty on cotton.