Cotton imports increase despite pressure on Indian cotton prices

Increasing import of raw and waste cotton in the last seven months has brought to fore the urgent need for measures to improve cotton productivity in India.

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Cotton imports were to the tune of $104 million in August 2024, $134.2 million in September 2024, $127.71 million in October, $170.73 million in November, and $142.89 million in December, 2024. In January this year, it stood at $184.64 million.

Comparably, the imports were $74.4 million in August 2023, $39.91 million in September 2023, $36.68 million in October 2023, $30.61 million in November 2023, and $29.47 million in December 2023. In January 2024, the imports were $19.62 million.

Meanwhile, the Cotton Corporation of India (CCI) has procured close to 100 lakh bales of Indian cotton that has come into the market since the beginning of the new season on October 1, 2024. In the peak cotton arrival season in December 2024, the CCI bought almost 60% of the daily arrivals at the minimum support price (MSP). The price of the Shankar 6 variety of cotton on Saturday was ₹52,500 a quintal.

Jaipal, a cotton farmer in Telangana, said at the beginning of the season that farmers are not happy because yield is less. “International cotton prices are weak and mills are able to buy from there,” he said.

Kurbur Shanthakumar, president of Karnataka State Federation of Farmer Associations, said the cost of production per quintal is ₹9,000 and the MSP is ₹7,235. But, brokers were buying in the open market at only ₹5,000 to ₹5,500 per quintal.

The Union Budget announced in February has a Cotton Mission aimed at improving productivity.

For the Indian textile industry, international cotton prices are weak and with export demand looking up for garments and home textiles, there is a need for the textile industry to be internationally competitive. More than 60% of garments exported are cotton-based. Extra Long Staple cotton can be imported duty free and exporters can import cotton without duty under Advance Authorisation. The mills seem to have imported cotton as international cotton prices were lower than Indian prices and the imports have not disturbed the local market, industry sources said.

“Brazil is an aggressive seller [in the international market]. Australia, the U.S., Africa, and Brazil were all comfortably placed in prices till a few days ago. Indian cotton prices were higher compared with these countries. The Indian textile mills took a calculated risk and imported in spite of 11% duty as Indian cotton and yarn are relatively over priced. The Indian government and textile industry should look at boosting demand so that textile exports increase and cotton prices remain in parity for the producers and processors. It is also very critical to maintain ‘fibre security’ for the mills by increasing cotton productivity and area,” Manish Daga, president of the All India Cotton Farmers Producers Organisations Association, said.

“If Indian cotton is 80-85 cents a pound, Brazilian cotton is 60-65 cents a pound. Cotton productivity in India is about 450 kg per hectare as against 1,800-2,000 kg/ha in Brazil. Indian yarn exports should increase,” Pankaj Sharda, director at Indian Cotton Association, said.

Cotton imports were high in 2018-2019 and 2021-2022 when the textile sector had good orders. India has 38% of cotton global acreage but only 23% of the global production. The government should look at acreage-based MSP for the farmers and take urgent steps to increase productivity, Southern India Mills’ Association chairman S.K. Sundararaman said.