Cotton Import Bill Exceeds USD 1 Bn in FY23 as prices Rise

Although cotton prices have recently fallen due to a drop in global demand, analysts are concerned about domestic production. Lower yields in India are mostly to blame for the predicted 300,000 bale decline in global production to 115.4 million bales.

According to the Economic Report 2023, stagnant cotton production is especially concerning given that textile prices have been steadily rising for the last three years, and apparel and footwear were among the primary drivers of headline inflation in FY23.

Consumption is expected to fall due to decreased use in India, Indonesia, and Vietnam, according to the US Department of Agriculture Foreign Agricultural Service. According to an official service report.

According to official figures, India's cotton import cost increased by 200% between April 2022 and January 2023, from USD 450.40 million in the same period last fiscal year to USD 1.34 billion between April 2022 and January 2023.

The trade data also revealed that imports increased rapidly between July and December. In the second half of 2022, India imported up to 17.50 lakh bales. Cotton export duties have been reduced between April 14th and September 30th, 2022.

According to the Cotton Association of India (CAI), "popularising high-density planting, farm mechanization, and putting a focus on research-oriented agronomy are some other important ways forward to increase our cotton productivity at least to the world cotton average productivity mark."