Indian Cotton Market: Supply Constraints and Trade Dynamics

23-May-2025 10:05 AM

Indian Cotton Market: Supply Constraints and Trade Dynamics
★ The Cotton Association of India (CAI) has reduced its domestic production estimate for the 2024–25 season by 400,000 bales (each of 170 kg), bringing it down to 29.13 million bales. The primary reason for this is lower output in Maharashtra. The initial estimate was 29.53 million bales.
★ As of the end of March, total cotton supply stood at 30.683 million bales, which includes 2.51 million bales of imports and an opening stock of 3.019 million bales.
★ By the end of March, the total stock was 12.783 million bales, out of which 2.7 million bales were held by millers and 10.83 million bales by the Cotton Corporation of India (CCI).
★ A drop of 520,000 bales is expected in global cotton consumption.
★ India’s cotton imports are likely to reach 3.3 million bales, which is more than double compared to 1.52 million bales in the previous season. This is due to a drop in domestic production.
★ Exports are expected to decline to 1.6 million bales, down from 2.836 million bales in the previous season.
★ According to the USDA, global cotton production has dipped by 690,000 bales due to reduced output in Argentina and China.
★ The Government of India has allowed cotton and textile imports from Bangladesh only through seaports, which will increase export costs for Bangladesh.
★ Wait for demand to pick up — prices are expected to rise.