Textile prices are likely to be stable for now, but global cotton risk remains | Today’s news

New Delhi: Below-normal rainfall associated with El Nino could be good news for the cotton sector as officials and industry executives expect farmers in key rainfed states to shift from water-intensive crops to cotton, helping to bridge the current sowing gap.

A normal cotton crop would ensure adequate raw materials for textile manufacturers and reduce scope for any increase in textile prices stemming from costlier imported cotton amid ongoing geopolitical tensions.

This comes against the backdrop of cotton acreage lagging behind last year’s level. As of July 17, cotton was sown in over 92.53 million hectares, down 5.96% from 98.39 million hectares in the same period last year, according to the latest weekly sowing data from the agriculture ministry.

This development is significant as cotton remains the dominant raw material for the Indian textile and apparel industry, accounting for approximately 80% of the fiber consumed in the industry and approximately 65% ​​of apparel production.

Key things

• Cotton seeding routes down 5.96% last year amid uncertainty at the start of the El Niño season.
• Maharashtra, Gujarat sowing falls; Telangana, Andhra Pradesh post this year’s cotton season gains.
• The CCI chief expects farmers to switch to cotton if rains continue to be scarce.
• An exemption from import duty until October eases supply concerns ahead of the arrival of the new crop.
• An ex-Tirupura exporter chief warns that the global impact of El Niño could still disrupt supplies.

Initial seeding data also show mixed trends across major cotton-producing states. Maharashtra, the country’s largest producer of cotton, saw a decline of 6.82% to 34.21 lakh hectares, while in Gujarat, sowing fell by 9.76% to 16.75 lakh hectares.

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In contrast, Telangana reported an increase of 6.62% to 16.64 lakh hectares and Andhra Pradesh reported an increase of 34.2% to 2.75 lakh hectares.

The final acreage will be closely watched by the textile industry. Cotton acreage has remained around 115 million hectares over the past two years, while production has declined from 336.6 million bales in FY23 to 290.24 million bales in FY26, tightening domestic supplies and increasing dependence on imports.

So far positive

From now until October 2026, import duty on cotton imports of around 11% has been waived. After that, the arrival of a new domestic cotton crop is expected to ease supply concerns.

“Textile manufacturers need not worry about availability of domestic cotton. Acreage is expected to improve as El Niño may encourage farmers in cotton-growing states to switch to cotton in case of lack of rainfall,” said LK Gupta, chairman and managing director of Cotton Corporation of India, a public sector undertaking under the Ministry of Textiles. “There is a reason for this. Other crops may not give a good yield when there is a lack of rainfall, but in the case of cotton, there is always a good chance of getting a reasonable yield even when the rainfall is deficient.”

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Gupta further said that CCI is working closely with textile mills and making a concerted effort to supply cotton directly to manufacturers rather than traders to help keep textile prices under control while ensuring that farmers receive better prices for their produce.

Industry executives also echoed that assessment, saying that current seeding trends do not indicate any major risk to cotton production.

“The sowing season is still at an early stage and planting is gaining momentum. The acreage gap is expected to narrow in the coming weeks. So there is no need to worry about cotton production,” said an executive of a leading textile company on condition of anonymity due to operational sensitivity.

El Nino may hit imports

However, Tirupur Exporters Association former president Raja M. Shanmugam said El Niño remains a global phenomenon and could still disrupt cotton supplies if production in major producing countries falls.

“The El Niño effect is not limited to India; it will be global. If there is a disruption in production, there is a chance of supply disruption, leading to higher prices of raw materials. In that case, the government will have to come up with corrective measures to support the industry,” Shanmugam said.

“In such a scenario, CCI’s role will be crucial. Since not all spinning mills can buy and store cotton for a long time, CCI should create a buffer stock and release cotton to mills at MSP (minimum support price) from time to time. Cotton should be sold only to actual users and not traders as traders often speculate and many are backed by foreign investors,” he added.

Farmers in key cotton-growing states also said insufficient but well-distributed rainfall could encourage a shift to cotton.

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Ishvar Bhai Chavda, a cotton grower from Gujarat’s Morbi district, said farmers would give preference to cotton if rainfall proved deficient. Chavda, who grows cotton on his 10-acre farm, has already completed sowing in his entire land, while many of his fellow farmers are also preparing to sow the crop, often referred to as ‘white gold’.

Another farmer, Ganesh Nanote from Maharashtra’s Vidarbha region, said lower but timely rainfall is beneficial for the cotton crop.

“If the rainfall is lower but comes on time, cotton production will increase along with acreage. Soybeans, which farmers often grow as a diversification crop alongside cotton, require more water. So farmers who would otherwise grow soybeans are likely to switch to cotton,” Nanote said.

Raw cotton imports rose 54.9% year-on-year to $1.89 billion in FY26, according to DGFT data. In contrast, exports fell by 33.9% to USD 436.37 million in the same period.