Textile prices likely steady for now, but global cotton risk lingers
New Delhi: The below-normal rainfall associated with El Nino may be good news for the cotton sector, as officials and industry executives expect farmers in
New Delhi: The below-normal rainfall associated with El Nino may be good news for the cotton sector, as officials and industry executives expect farmers in key rain-fed states to shift from water-intensive crops to cotton, helping bridge the current sowing gap. A normal cotton crop would ensure adequate raw material for textile manufacturers and reduce the scope for any increase in textile prices stemming from costlier imported cotton amid ongoing geopolitical tensions. This comes against the backdrop of cotton acreage trailing last year's level. Cotton has been sown over 92.53 lakh hectares as of 17 July, down 5.96% from 98.39 lakh hectares in the corresponding period last year, according to the agriculture ministry's latest weekly sowing data. The development is significant because cotton remains the dominant raw material for India's textile and apparel industry, accounting for around 80% of the fibre consumed by the sector and around 65% of apparel production. Key Takeaways Cotton sowing trails last year by 5.96% amid early-season El Niño uncertainty. Maharashtra, Gujarat sowing falls; Telangana, Andhra Pradesh post gains this cotton season. CCI chief expects farmers to shift toward cotton if rainfall stays deficient. Import duty waiver until October eases supply concerns before new crop arrives. E Tirupur exporters' head warns global El Niño impact could still disrupt supplies. The initial sowing data also show mixed trends across major cotton-producing states.
Maharashtra, the country's largest cotton producer, recorded a 6.82% decline in acreage to 34.21 lakh hectares, while Gujarat saw sowing fall 9.76% to 16.75 lakh hectares. In contrast, Telangana reported a 6.62% increase to 16.64 lakh hectares, and Andhra Pradesh posted a 34.2% jump to 2.75 lakh hectares. The final acreage will be closely watched by the textile industry. Cotton acreage has remained around 115 lakh hectares over the past two years, while production has fallen from 336.6 lakh bales in FY23 to 290.24 lakh bales in FY26, tightening domestic supplies and increasing reliance on imports. Positive for now As of now, the import duty of around 11% on cotton imports has been waived until October 2026. Thereafter, the arrival of the new domestic cotton crop is expected to ease supply concerns. “There is no need to worry for textile manufacturers with respect to the availability of domestic cotton. The acreage is expected to improve, given that El Niño may encourage farmers in cotton-growing states to shift to cotton in the event of deficient rainfall,” said L.K. Gupta, chairman-cum-managing director, Cotton Corporation of India, a public sector undertaking under the Ministry of Textiles. “There is a reason for this. Other crops may not yield well under deficient rainfall, but in the case of cotton, there is always a good chance of getting a reasonable yield even if rainfall is deficient.” Gupta further said that CCI is working closely with textile mills and making concerted efforts to supply cotton directly to manufacturers rather than traders, to help keep textile prices under control while ensuring farmers receive better prices for their produce.
The BriefWire