Brazil has become the world’s leading producer and exporter of cotton, the preeminence of United States. Brazil’s s cotton planted area reached a record 1.97 million hectares, driven by favorable prices and reduced production costs.
Cotton exports for the crop year 24/25 are forecasted at 12.6 million bales, supported by global demand and reduced Indian output. Despite lower yields due to weather challenges, production is estimated at 16.9 million bales, up 13% from the previous year.
Domestic consumption remains stable at 3.2 million bales, and exports continue to thrive, with China leading the demand. Brazil’s strategic positioning and cost advantages underline its steady growing dominance in the global cotton market.
Meanwhile another heavy weight in cotton production, India, for the year 2024/25 is expecting an unchanged harvest of 25 million 480-pound bales, the lowest in five years. This is attributed to a reduced planting area of 11.8 million hectares, despite improved yields of 461 kilos per hectare, marking the highest in four years. Domestic ex-gin prices dropped by 9% to 82 cents over the past month, further challenged by a 4% decline in the Cotlook-A Index.
New Delhi has stepped in to stabilize market prices through MSP procurement, with initial purchases reported at 176,000 bales. Importantly, global price competitiveness has spurred a surge in cotton imports, particularly from Australia and the U.S., with shipments in October up 479% in value year-on-year. Meanwhile, weak domestic demand continues to exert pressure on farm-gate prices, leading to phased market arrivals by farmers.
India’s textile sector shows resilience as cotton-based yarn and garment exports rise by 7% and 35%, respectively, despite domestic challenges. However, declining apparel production, coupled with higher input costs, limits domestic mill consumption, which is forecasted at 25.5 million bales. Additionally, the upcoming Bharat Tex event in February 2025 is expected to highlight the sector’s potential amid ongoing market adjustments.
India’s cotton sector faces a challenging year with reduced production and subdued domestic prices. MSP interventions and export opportunities may provide crucial support.
Source: https://en.mercopress.com/