According to the Cotton Association of India (CAI), the country’s cotton stocks are expected to fall by nearly 31% in the 2023/24 marketing year, reaching their lowest level in more than three decades. This significant drop is due to lower production and rising domestic consumption.
The CAI stated that cotton stocks at the end of the 2023/24 marketing year, which ends on September 30, could decline to 2 million bales (340,000 metric tons), down from 2.91 million bales in the previous year.
The lower stockpiles will limit India’s cotton exports in the current marketing year, as the world’s second-largest producer will have less surplus to ship abroad. This is expected to support global cotton prices (CTc2), which have been under pressure in recent months.
Additionally, the reduced cotton supply could also lead to higher domestic prices (MCOTc1) in India, potentially weighing on the profit margins of local textile companies.
The CAI forecast India’s cotton production in the current season at 30.97 million bales, down from the previous year’s 31.89 million bales. Meanwhile, the country’s cotton consumption is expected to rise to 31.70 million bales, up from 31.10 million bales a year ago.
Despite the lower production, India’s cotton exports are projected to increase to 2.20 million bales in the 2023/24 season, compared to 1.55 million bales a year earlier. The key export destinations for Indian cotton include China, Bangladesh, and Vietnam.
The combination of lower production, higher domestic demand, and increased exports is set to deplete India’s cotton stocks to their lowest level in more than three decades, potentially impacting the global cotton market dynamics and the domestic textile industry.