MUMBAI, 11 August 2025: The sowing season is currently underway in the states considered to be the hubs of cotton production. However, according to preliminary reports, this time the cotton sowing is expected to decrease compared to last year.
If we look at the statistics, cotton has been sown in 20.35 lakh hectares in Gujarat till August 1, which was 23.35 lakh hectares by the same period last year. The average area of cotton sowing in Gujarat for the last five years has been 25.34 lakh hectares.
Reports of a decrease in sowing are also being received in Rajasthan. The sowing figures across the country are also coming down. According to the government data released last week, a total of 105.87 lakh hectares of cotton has been sown, which was recorded at 108.43 lakh hectares last year. Now, the possibility of new sowing is decreasing after August 15. However, this time, as farmers in Karnataka and Telangana are planting more cotton, the total planting is expected to decrease by about three percent.
One of the main reasons for the decline in cultivation in Gujarat is said to be the compensation received by farmers. Farmers are expecting to earn more from groundnut cultivation this time than they earn from cotton cultivation. Therefore, the cultivation pattern has changed. NCDEX Shankar Kapas futures prices prove why farmers have turned to groundnut. Although the expiry of these futures is April-2026.
Still, the prices are continuously falling. On July 18-2025, the price of cotton per 20 KG was INR 1631, which fell to INR 1590 on August 07-2025. Along with the decline in cultivation, the demand for exports is also decreasing. The ginning season is currently over. However, the bales are available as much as desired.
Despite the continuous increase in cottonseed meal prices, cotton prices are not getting support. On July 18, 2025, the price of Cotton seed meal per quintal was INR 3097, which increased to INR 3300 on August 07. Open interest of NCDEX Kapas futures is in the developing stage, which is expected to be more active in the future. Along with this, there is an open interest of 80,000 tons in cottonseed meal futures. While an average daily trade of INR 50 crore is done in the futures.
The balance sheet of cotton in India provides a clear picture of the market situation. According to the data of the Cotton Association of India (CAI), the season that ended on June 30 ended with a total export of 17 lakh bales. While imports amounted to 39 lakh bales.
urrently, Indian traders and ginners are estimated to have a stock of 55.59 lakh bales. When the season started, everyone was giving their own production estimates. In October-24, traders were talking about 335 lakh bales production. But now everyone is satisfied with the production of 311 lakh bales. If we assume the total supply of 380 lakh bales, then the demand remains at 308 lakh bales. Thus, the excess supply is responsible for the fall in the prices of bales and cotton. On the other hand, there is no stock of Cotton seed meal in the market. Therefore, its prices are increasing.
America used to dominate the global market in the export of bales, which is now being captured by Brazil. According to the latest figures, Brazil is now competing with America with the export of 165.82 lakh bales. In terms of production, Brazil has already surpassed America. Trump is taking down America's position in the global market by playing the game of tariffs. It will be too late for him to realize this.
By Kalpesh Sheth is an commodities expert with years of experience.
Image credit: apparelresources.com
