India’s cotton imports likely to rise in 2024-25 crop year

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India’s cotton imports may rise during the 2024-25 crop year (October 2024-September 2025) on lower carry-forward stocks and the likely impact on the output due to a drop in its acreage. Also, a section of the trade, taking advantage of lower global prices in the recent past, has contracted imports for November-March delivery, sources said.

“The expectation is that imports may touch 35 lakh bales this year,” said Atul Ganatra, President, Cotton Association of India, the apex trade body for the sector. As per the CAI data, imports till August-end in the 2023-24 season were 16.40 lakh bales of 170 kg each.

Imports are higher because of anticipated lower crop as the sowing is down by 12-13 lakh hectares. Mainly, there’s no carry-forward stock of 2023-24, Ganatra said. “We are having carry-forward stock of 30 lakh bales of kapas (unprocessed cotton) with farmers of 2022-23.” The USDA has estimated India’s 2024-25 cotton output at 24 million bales of 480 pound each, down 7 per cent from last year’s 25.80 million bales on lower harvest areas.

Landed cost of contracts

As per the CAI cotton balance sheet as of end August, the closing stocks as of September 30, 2024, are estimated at 23.32 lakh bales against 28.90 lakh bales in the previous year.

Ganatra said the trade has already contracted shipments of 7-10 lakh bales for the November-March shipment period. With a customs duty of 11 per cent, the landed cost of Brazilian cotton of 28 mm for delivery on Indian ports in December works out to ₹64,880 as of October 1. Similarly, the landed cost for Australian cotton of 29 mm with 11 per cent customs duty works out to ₹69,120, while the West African cotton of 28.7 mm, which attracts a duty of 5.5 per cent works out to ₹63,480 for March 2025 shipment and delivery in April-May, he said.

Spot rates, as per CAI data, for 28 mm cotton per candy (356 kg) on October 4 was down by ₹400 at ₹56,700, while the 29 mm is also down at ₹58,000.

Arrivals on October 3 stood at 37,500 bales across the country, as per CAI data, up from the previous day’s 14,800 bales. The cumulative arrivals from October 1 stood at 80,300 bales.

Too early to assess crop

Ganatra said it is too early to predict the 2024-25 crop size as of now. “There is lot of damage due to the last rains” Ganatra said, adding that the crop has been delayed by about a month in Maharashtra and Gujarat.

Ramanuj Das Boob, vice president of All India Cotton Brokers Association, said till now around 10 lakh bales have been contracted when the futures on ICE was around 66-67 cents per pound. Now the ICE futures are now hovering around 72/73 cents per pound. “Further imports will depend on how the Indian cotton prices react once the arrivals pick up. Already with the initial arrivals, the market has started coming down,” he said.

The daily arrivals of new raw cotton in Raichur of Karnataka are in the range of 3,000-5,000 bales and prices are in the range of ₹7,000-7,700 per quintal. In Adoni, Telangana, prices are in the range of ₹7,000-7,400 per quintal, Boob said, adding that the moisture content is high at around 10 per cent, resulting in slow buying.

The minimum support price for medium staple cotton is ₹7,121 per quintal, while for long staple it is ₹7,521. Boob said the expectation on the crop is good despite the lower acreage, while arrivals in some areas of Gujarat, Maharashtra and MP may get delayed. From October 15 onwards, arrivals may improve, he said.