India's cotton production for 2024-25 projected at 25 million bales amid market challenges

India's cotton production for the 2024-25 marketing year is expected to be 25 million 480-pound bales, marking the lowest in five years. This decline is due to reduced cultivation area of 11.8 million hectares, despite higher yields of 461 kg per hectare, the best in four years. Domestic cotton prices have dropped by 9 per cent over the past month, compounded by a 4 per cent decrease in the Cotlook-A Index, adding pressure on the market.

The government has implemented procurement efforts under the Minimum Support Price (MSP) program, with initial purchases of 176,000 bales to stabilize prices and support farmers. Additionally, rising imports, especially from Australia and the US, reflect the price competitiveness and quality preference of global markets. In October, cotton imports surged by 479 per cent in value year-on-year.

Despite these challenges, India's textile industry remains resilient, with cotton-based yarn and garment exports increasing by 7 per cent and 35 per cent, respectively. However, weak domestic demand and rising input costs continue to limit mill consumption, which is forecasted at 25.5 million bales. Looking ahead, the Bharat Tex event in February 2025 will showcase the sector’s potential amid ongoing market adjustments.