India’s cotton production forecasts show considerable variation among different industry and government sources, but a general consensus suggests a decline in production for the 2024-25 season. The Ministry of Agriculture has projected production at 294.25 lakh bales of 170 kg, slightly below the Cotton Association of India’s (CAI) estimate of 295.30 lakh bales. In contrast, the U.S. Department of Agriculture (USDA) has estimated a considerably higher production figure of 320 lakh bales (equivalent to 25 million bales of 480 pounds).
Last week, the Ministry released its second advance estimates for the current crop year, revising the cotton production forecast down from 299.26 lakh bales to 294.25 lakh bales. Initially, the first advance estimate in November 2024 had projected cotton production at 325.22 lakh bales for the previous season (2023-24). This year’s production marks a seven-year low, reminiscent of the 280.42 lakh bales recorded in the 2018-19 season.
CAI has also adjusted its forecast, reducing its estimate by 6.45 lakh bales to 295.30 lakh bales in its February 2025 report, having previously estimated 301.75 lakh bales in January. Last year’s production estimate stood at 327.45 lakh bales for the 2023-24 season.
The USDA’s cotton production estimate, included in its monthly World Agricultural Supply and Demand Estimates (WASDE) report, remains unchanged at 25 million bales of 480 pounds, equivalent to 320 lakh bales of 170 kg. This figure represents a decrease from the previous season’s estimate of 325 lakh bales.
As of the current season, the Cotton Corporation of India (CCI) has procured approximately one crore bales of cotton at the minimum support price (MSP), as prevailing cotton prices have fallen below this threshold. The combination of sluggish garment demand in the global market and higher prices of Indian cotton compared to ICE cotton has negatively impacted market sentiment.
Despite indications of limited domestic cotton availability, prices have gradually increased by around two percent over the past two weeks. However, demand from the downstream industry remains weak. The CCI is attempting to sell cotton from its previous year’s stock, but the response has been lukewarm. Nevertheless, ginners are still purchasing seed cotton at elevated prices due to ongoing procurement by the CCI. Indian ginning mills are focused on building up their cotton inventories to prepare for the lean months ahead.
Market analysts suggest that domestic cotton prices will likely track the trajectory of ICE cotton prices. Should global prices rise, domestic prices are expected to follow suit, although ongoing tariff tensions pose a significant obstacle to any substantial increase in cotton prices.
