The ministry released its second advance estimates last week for the current crop year (2024-25), reducing the cotton production estimate to 294.25 lakh bales from the 299.26 lakh bales projected in the first advance estimate. The first advance estimate, released in November 2024, had estimated cotton production at 325.22 lakh bales in the previous season (2023-24). Production has now reached a seven-year low. The last time production was this low was in 2018-19, when it stood at 280.42 lakh bales.
India’s cotton production for 2024-25 season is expected to decline, with the Ministry of Agriculture estimating 294.25 lakh bales, lower than CAI’s 295.30 lakh bales and significantly below USDA’s 320 lakh bales.
Cotton Corporation of India has procured 1 crore bales at MSP due to weak prices.
Limited availability is pushing prices up, but tariff tensions and weak demand remain key concerns.
CAI has lowered its estimate by 6.45 lakh bales to 295.30 lakh bales in its February 2025 report. Previously, it had estimated production at 301.75 lakh bales in its January 2025 report. The industry organisation had estimated production at 327.45 lakh bales in the last season (2023-24).
USDA released India’s cotton production estimate in its monthly World Agricultural Supply and Demand Estimates (WASDE) report. The US government body has estimated production at 25 million bales of 480 pounds, which is equivalent to 320 lakh bales of 170 kg. It did not revise India’s estimate from the February 2025 WASDE report but has reduced the production estimate from 25.40 million bales of 480 pounds (equivalent to 325 lakh bales of 170 kg) in the last season. Therefore, it has lowered its estimate by 5 lakh bales of 170 kg.
During the current season, the government’s nodal agency, Cotton Corporation of India (CCI), has procured around one crore bales of cotton at the minimum support price (MSP) as cotton prices remained lower than the MSP. Slow garment demand in the global market and higher Indian cotton prices compared to ICE cotton have dented market sentiment.
There are indications that the domestic market is facing limited cotton availability. Cotton prices have seen a gradual rise over the last two weeks, increasing by around two per cent. However, cotton demand in the downstream industry remains weak. CCI is selling cotton from its previous year’s stock, which has received a lukewarm response from the industry. However, ginners are purchasing seed cotton even at higher prices due to continued procurement by CCI. Indian ginning mills are trying to build up cotton stock for the lean months ahead in the current season.
Market experts say that domestic cotton prices will move in line with ICE cotton. If global prices rise, domestic cotton prices will also increase. However, the current tariff tensions remain the biggest barrier to any significant increase in cotton prices.
Fibre2Fashion News Desk (KUL)