Required Report: Required - Public Distribution Date: December 04, 2024
Report Number: IN2024-0065
Report Name: Cotton and Products Update
Country: India
Post: New Delhi
Report Category: Cotton and Products
Prepared By: Dhruv Sood
Approved By: Rhiannon Elms
Report Highlights:
On November 5, the Ministry of Agriculture and Farmers Welfare published a marketing year 2024/25
production forecast at the lowest level in five years, at 23.4 million 480 lb. bales on an area of 11.4
million hectares. FAS Mumbai forecasts MY 2024/25 India cotton production at 25 million 480 lb. bales
on an area of 11.8 million hectares, unchanged from the previous forecast. All India yields are forecast
at 461 kilograms per hectare, the highest in four years on improved soil moisture and water availability,
and no major reports of pest incidences. The government has begun procuring cotton under minimum
support prices (MSP), as slow domestic demand is keeping prices low, although industry is showing
resilience through export opportunities for value added textile products.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY
STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY
Production, Supply and Distribution
Cotton 2022/2023 2023/2024 2024/2025
Market Year Begins Aug 2022 Aug 2023 Aug 2024
USDA New USDA New USDA New
India
Official Post Official Post Official Post
Area Harvested (1000 HA) 12,927 12,927 12,680 12,700 11,800 11,800
Beginning Stocks 1000 480 lb. Bales 8,396 8,396 10,824 10,824 9,799 10,599
Production 1000 480 lb. Bales 26,300 26,300 25,400 26,000 24,000 25,000
Imports 1000 480 lb. Bales 1,727 1,727 885 885 2,300 2,000
Total Supply 1000 480 lb. Bales 36,423 36,423 37,109 37,709 36,099 37,599
Exports 1000 480 lb. Bales 1,099 1,099 2,310 2,310 1,300 1,200
Domestic Use 1000 480 lb. Bales 24,500 24,500 25,000 24,800 25,500 25,500
Loss 1000 480 lb. Bales - - - - - -
Domestic Use and Loss 1000 480 lb. Bales 24,500 24,500 25,000 24,800 25,500 25,500
Ending Stocks 1000 480 lb. Bales 10,824 10,824 9,799 10,599 9,299 10,899
Total Distribution 1000 480 lb. Bales 36,423 36,423 37,109 37,709 36,099 37,599
Stock to Use % (PERCENT) 42 42 36 39 35 41
Yield (KG/HA) 443 443 436 446 443 461
(1000 HA),1000 480 lb. Bales, (PERCENT), (KG/HA)
Area and Production
FAS Mumbai forecasts MY 2024/25 (Oct/Sep) planted area to remain at 11.8 million hectares. As
mentioned in the October GAIN report IN2024-0062, sowing in southern states extends until
November/December, and is reported as part of Rabi (winter) sowing and included in the final planted
area estimates.. FAS Mumbai forecasts MY 2024/25 production at 25 million 480 lb. bales (32 million
170-kilogram bales/5.4 million metric tons), unchanged from the previous forecast. Government
advisories indicate harvesting is in the latter stages in north India, with no incidences of pink bollworm
infestation, while harvest in central India has begun in early sown crop only. In south India, almost 90
percent of the sown crop is in boll bursting to harvesting stage, with late sowing being carried out in a
few locations. The all-India reservoir storage status bulletin dated November 7 indicates 26 percent
higher water storage than last year, and 16 percent higher than the ten-year national average, portending
advantageous prospects for crop growth and development.
On November 5, the Ministry of Agriculture and Farmers Welfare (MOAFW) released the first advance
estimates of area and production for 2024/25. MY 2024/25 area is forecast at 11.4 million hectares, with
production estimated at 23 million 480 lb. bales (30 million 170-kilogram bales/ 5 million metric tons).
All India yields are estimated at 448 kilograms per hectare. Second, third and final advance estimates
will be released throughout the growing season. Sources indicate that the Committee on Cotton
Production and Consumption (COCPC) is scheduled to meet on November 25 to discuss the balance
sheet for MY 2024/25 and finalize estimates for MY 2023/24.
Stock
Higher carryover stocks will leave India with an exportable surplus, however, a lag in raw cotton export
demand will likely keep prices subdued. MY 2024/25 (Oct/Sep) cotton arrivals reported in October are
at 1.2 million 480 lb. bales (1.5 million 170-kilogram bales), 23 percent lower than last year. Farmers
are transporting raw cotton to market yards in a phased manner, as farmgate prices are currently trading
below MSP. The Cotton Corporation of India has begun small scale MSP procurement operations across
five states and procured 176,000 480 lb. bales (225,000 170-kilogram bales) to date. Trade sources
expect a larger-scale MSP procurement program to begin during peak arrivals between December and
February. MY 2023/24 market arrivals as reported by Ministry of Textiles are 25.7 million 480 lb. bales
(32.9 million 170-kilogram bales), surpassing the official cotton production estimate which will likely
increase MY2024/25 carryover stocks.
Consumption
Post forecasts MY 2024/25 mill consumption to remain at 25.5 million 480 lb. bales (32.6 million 170-
kilogram bales/5.6 million metric tons). Preliminary textile export data published by the Ministry of
Commerce and Industry shows cotton-based yarn, fabrics and home textile shipments rose nearly seven
percent by value in October, as compared to last year, while readymade garment shipments are up by 35
percent. The domestic market remains subdued as mills catering to local industries face slow demand in
the apparel sector that is further exasperated by tighter margins (refer figure 1) due to rising input costs.
According to the Index of Industrial Production - Quick Forecasts of IIP September 2024 report, textile
production remained flat, while apparel production fell by eight percent in September 2024 from the
previous month.
India ex-gin prices have fallen by nine percent over the past month to 82 cents, while Cotlook-A Index
has fallen by four percent to an average price of 81 cents. Lower international prices are prompting mills
to import higher quality contamination-free cotton.
Figure 1: Weekly Indian Ex-Gin Price* vs Cotlook A-Index
130
prices - cents per pound
differential - cents per pound
110 40
90 30
70
20
50
30 10
10
-
(10)
(30) (10)
Jan-24
Jan-24
Apr-24
Jul-24
Jul-24
Oct-24
Oct-24
Apr-24
Aug-24
Aug-24
Aug-24
Nov-24
May-24
May-24
Jun-24
Jun-24
Sep-24
Feb-24
Feb-24
Feb-24
Mar-24
Mar-24
Sep-24
Indian Ex-Gin Cotlook A-Index
*Spot rate for long staple 29 mm cotton in Gujarat
Source: Cotton Association of India, Cotlook A-Index
Marketing
Second Edition of Bharat Tex – India’s Largest Textile Event
The second edition of the Bharat Tex Show will be held in New Delhi from February 14-17, 2025. The
event will feature pavilions for apparel, home furnishings, floor coverings, fibers, yarns, threads, fabrics,
carpets, silk, handlooms, handicrafts, technical textiles, apparel machinery, dyes and chemicals.
Exports
The Post forecast for MY 2024/25 raw cotton exports remains at 1.2 million 480-lb. bales (1.5 million
170-kilogram bales/262,000 metric tons). Cotton lint prices are trading one to two cents higher than the
Cotlook A-Index, prompting larger mills to import cotton for the foreseeable future. Preliminary export
data for October shows a 13 percent drop in shipments from the same period last year. Bangladesh
remained the top export market with 90 percent market share. Cumulatively, MY2024/25 shipments
between August and October also witnessed a 36 percent drop (refer figure 2).
Figure 2: Cotton Exports by Month
600,000
500,000
In 480 lb. bales
400,000
300,000
200,000
100,000
-
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
2023/24 5-year Average (2018-2022) 2024/25
Source: Directorate General of Foreign Trade, Ministry of Commerce, and Industry
Imports
Post forecasts MY 2024/25 cotton imports at two million (480-lb.) bales (2.6 million 170-kilogram
bales/436,000 metric tons), unchanged from the previous forecast, as imported cotton is two percent
cheaper than domestic long staple shankar-6 variety. Preliminary import data indicates raw cotton
shipments in October are up 479 percent in value from last year. Cumulatively, MY2024/25 shipments
between August and October surged by 221 (refer figure 3). Top suppliers of imported cotton in October
were Australia, Mali, Brazil, and the United States. Almost 44 percent of total imports in October landed
in south Indian ports indicating the strong preference for foreign origin cotton by south India textile
mills. According to U.S. trade data, U.S. exports during August and September have risen by 252
percent as compared last year due to strong demand for duty free extra-long staple (Pima) cotton for
value added products.
Figure 3: Cotton Imports by Month
350,000
300,000
In 480 lb. bales
250,000
200,000
150,000
100,000
50,000
-
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
2023/24 5-year Average (2018-2022) 2024/25
Source: Directorate General of Foreign Trade, Ministry of Commerce, and Industry
Attachments:
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