Cotton prices jump amid concerns of lower production in 2024/25

Cotton prices rise on concerns about decreased output in 2024/25

Cotton candy prices rose 0.2% to close at ₹54,480 on fears of a reduction in cotton production in India. The USDA has lowered its forecast for India's 2024/25 cotton production by 7.4% to 30.72 million bales, citing excessive rainfall and pest infestation. Cotton acreage fell by 9% to 11.29 million hectares, as many farmers in Gujarat have started cultivating peanuts, which gives them better returns.

This reduction is expected to increase India's cotton imports by up to 2.5 million bales, significantly higher than last year's 1.75 million bales, while exports may fall to 1.8 million bales from 2.85 million bales.

Globally, the USDA has raised cotton production estimates by 200,000 bales, with growth in China, Brazil and Argentina offsetting declines in the US and Spain. US cotton production is estimated at 14.2 million bales, down by more than 300,000 bales due to Hurricane Helen. US cotton exports are also expected to fall by 11.5 million bales due to weak global demand. The final estimate of worldwide stocks is 76.3 million bales, slightly lower than the previous forecast.

Spot prices in Rajkot, a major cotton trading hub, fell 0.41% to ₹25,814.95.

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