India's Cotton Production Faces a 7.4% Plunge: What It Means for Global Markets

India's cotton production is forecasted to drop by 7.4% to 30.2 million bales in 2024/25 due to reduced planting and crop damage from excessive rain. This decline will reduce exports and increase imports, boosting global prices. The area planted with cotton has fallen notably in Gujarat, further impacting output.

India is bracing for a significant 7.4% dip in cotton production, projected to reach only 30.2 million bales for the 2024/25 period, a top trade body announced on Tuesday. Excessive rainfall has ravaged the crop, and a reduction in planting areas further exacerbates the decline.

This downturn in production will inevitably shrink exports from India, the world's second-largest cotton producer, in the marketing year that kicked off on October 1. Consequently, the country will need to bolster imports, a move likely to support global cotton prices. According to the Cotton Association of India (CAI), imports may rise to 2.5 million bales, up from the previous year's 1.75 million bales.

Exports, on the other hand, are expected to plunge to 1.8 million bales from last year's 2.85 million, as noted by CAI President Atul Ganatra. The primary factor behind this decline is a significant reduction in the planted area, dropping from 12.69 million hectares to 11.29 million hectares. Farmers in Gujarat, a key producer, opted to plant groundnuts instead, seeking better returns.

(With inputs from agencies.)