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Informist, Wednesday, Aug 28, 2024

MUMBAI – The International Cotton Advisory Committee has forecast global cotton production is likely to increase to 26.33 mln tn in 2024-25, the highest level since 2017-18 driven by rebounds in major producing countries such as the US, India, China, Brazil and Pakistan. 

Global production is expected to rise 9.2% in 2024-25 from 24.12 mln tn a year ago, according to the committee's report – Cotton Review of the World Situation – released on Tuesday. 

The global cotton consumption is estimated to rise to 25.87 mln tn, the highest since 2018-19, according to the report. The global cotton consumption for 2023-24 is estimated at 24.98 mln, up nearly 6% from a year ago. The expected growth in consumption in 2024-25 is likely to be driven by rising demand in the textile and apparel industries, particularly in major cotton-consuming countries such as China, India, Pakistan, Bangladesh, and Vietnam, according to the report.

China is expected to remain the world's largest consumer of cotton at 8.5 mln tn in 2024-25, the report said. India's cotton consumption is estimated at 5.6 mln tn, and Pakistan's at 2.1 mln tn, according to the report. 

Global cotton trade in 2024-25 is expected to reach 10.3 mln tn from 9.9 mln tn in 2023-24 "reflecting continued growth from the recent low in 2022-23", the report said. This marks the second-highest trade volume since 2020-21, it said. The US is likely to remain the largest exporter in 2024-25 at 2.83 mln tn, the report said. Brazil, Australia, Turkey, and India are likely to be the other top exporters, the report said.

Global cotton prices for 2024-25 are estimated to be at a five-year low due to the projected increase in ending stocks, which are expected to rise to 19 mln tn, the report said. The higher production relative to consumption will exert downward pressure on prices, it said. 

While prices remain under pressure, the overall market outlook is positive, it said. Cotton prices are highly volatile and are influenced by global supply and demand dynamics, trade policies, and economic conditions, it said.  

At 1345 IST, the most active December cotton futures contract on the Intercontinental Exchange was at 69.2 cents per pound, down 1.1%, from the previous close. 

DOMESTIC SCENARIO 

India's cotton production is estimated at 5.5 mln tn in 2024-25, unchanged from last year, the report said. The domestic cotton consumption is expected to rise to 5.6 mln tn in 2024-25 from 5.4 mln tn a year ago, driven by robust demand from the textile sector, it said. The government’s support for the textile industry and favourable trade policies contribute to this growth, it said, adding that the Indian textile sector benefits from a large domestic market and strong export demand. 

Cotton exports from India are projected at 300,000 tn in 2024-25, as against 459,000 in 2023-24, the report said.

"The Indian government supports the cotton export sector through various initiatives, including export incentives and infrastructure improvements. Additionally, India benefits from long-standing trade relationships with major cotton-importing countries," the report said.  End

US$1 = 83.96 rupees

Reported by J. Navya Sruthi

Edited by Saji George Titus

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