India’s cotton Imports will observe a surge this year (2024-25) of about 39 lakh bales, in which each bale weighs 170 kg. The numbers have increased if we compare them to last year, which was about 15.2 lakh bales. Surprisingly, Indian cotton prices are currently 10-12% higher than the international market prices. For instance, Brazilian cotton costs about ₹51,000 per candy (a candy is 356 kg), but after import duties, it costs ₹56,000.
Reasons behind the surge in India’s cotton Imports
The major reason behind the surge in India’s cotton imports is that International cotton prices are lower than in India. Moreover, Mills wants cleaner, contaminant-free cotton that they can get from imports. Notably, about half of the imports are from Brazil. Another 8-10 lakh bales come from African countries (which have a lower import duty), and about 3 lakh bales come from Australia under a duty-free quota.
How much cotton is imported yet?
By the end of July, 33 lakh bales had arrived at Indian ports. Strikingly, the value of cotton imports increased by 61% from April to July compared to last year. Total cotton imports in value terms are anticipated to more than double this year compared to last year. However, Cotton production in India is expected to be a bit lower this year (311.4 lakh bales) compared to last year (336.45 lakh bales). Domestic demand is expected to stay about the same or slightly higher. Closing stock (leftover cotton) is expected to be higher than last year. Hence, cotton prices are cheaper abroad, and mills want high-quality cotton. India is importing record amounts this year, even though local cotton production has been on the lower side. This helps meet demand and keep the mills running smoothly.