CAI President Interview on CNBC Bazar (Gujarati), Dated 19.09.2025
Q1. What is the reason ICE futures are range-bound between 64 to 69 cents?
Ans.: Since last year, ICE futures have been range-bound between 64 to 70 cents. The main reasons are :
1. Brazil’s bumper crop of about 240 lakh bales (Indian 170 kg standard). Brazil is offering cotton at 4 to 6 cents lower than the U.S.
2. China is producing its largest cotton crop in the last 12 years and has stopped importing U.S. cotton.
These two factors are exerting pressure on ICE futures and preventing any upward movement. Until ICE futures cross 75 cents, we will not see a significant rise in Indian or global cotton markets.
Q2. What is the outlook for Indian cotton and the condition of the new crop?
Ans.: Currently, Indian cotton prices are steady, ranging from ₹53,000 to ₹55,000 per candy, depending on quality. These rates are expected to remain stable for some time, and an upward trend is unlikely in the near term.
On 30th September 2025, India will have record closing stocks of 60–65 lakh bales — the highest since the COVID year. The new season (starting 1st October) will therefore open with 60–65 lakh bales of old stock, equivalent to around 75 days of mill consumption.
For the new crop, state associations estimate a 5–10% higher output compared to last season, mainly due to the widespread adoption of new “4G” technology seeds across major cotton-growing states. According to Gujarat experts, these seeds yield over 700 kg per hectare with 36–40% lint output.
* Expected new crop (2025/26): 325–340 lakh bales (vs. 312 lakh last season)
* Opening stock: 60–65 lakh bales
* Imports expected: 40–50 lakh bales
Thus, the total availability will be about 430 lakh bales. This surplus will put downward pressure on the market.
Q3. Out of the 60–65 lakh bales carry-forward stock on 30th September, how much will be with CCI, traders, MNCs, and mills?
Ans.: Currently, CCI holds 12–15 lakh bales of unsold stock, plus 20–25 lakh bales sold but not yet lifted. Out of this, about 15 lakh bales were sold in the last 15 days alone and remain unlifted. Therefore, by 30th September, CCI’s godowns will hold around 30–35 lakh bales, while mills will have another 30–35 lakh bales — making the total 60–65 lakh bales.
This year, mills purchased heavily from CCI and also imported record quantities. By 30th September, mills are expected to have an average of 40–45 days’ stock in their godowns.
Since the government has allowed duty-free imports until 31st December, mills have covered imports in large volumes, especially lower-quality cotton at ₹48,000–₹51,000 (Indian port delivery). Around 20 lakh bales are expected to arrive at Indian ports between October and December.
Q4. Should the government reconsider the duty-free import decision, as it could harm farmers?
Ans.: Farmers are protected by higher MSP rates of ₹8,110 per quintal. Duty-free import was a long-pending demand of the textile industry, and its approval addresses that need.
Q5. Why are Indian mills importing such large quantities despite sufficient domestic stock?
Ans.: There are two main reasons:
1. Imported cotton, especially Brazilian, is cheaper than Indian cotton.
2. CCI procures over 100 lakh bales between October and April but withholds selling immediately, storing it for 8–9 months. Mills requiring continuous supply therefore turn to imports.
For the next season, contracts for about 20 lakh bales (October–December shipment) are already in place. Overall, imports could reach 40–50 lakh bales. With this plus higher domestic production and record opening stock, India may see more than 100 lakh bales of carryover stock on 30th September 2026 — the highest ever.
Q6. The government recently reduced GST on man-made fibres from 18% to 5%. How much shift do you expect from cotton to man-made fibre?
Ans.: This 13% tax advantage will boost demand for man-made fibres. As per Grasim (Birla), sales of viscose and other fibres are expected to rise by 5–7% in the coming year. Consequently, Indian cotton consumption could decline by 15–20 lakh bales.
For 2025–26, overall cotton consumption may fall from 315 lakh bales to about 290 lakh bales, mainly due to the GST reduction on man-made fibres and the 50% U.S. tariff.
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