India's cotton sowing season is halfway through, and the area gap has narrowed to less than 6%. The latest official data shows that as of July 17, the country had sown 9.253 million hectares of cotton, down 5.96% year-on-year. While this figure fell short of market expectations, the rainfall deficit caused by El Niño is quietly reshaping planting patterns—farmers in some major producing states are shifting from water-intensive crops to cotton, which could reverse the sowing decline in the second half of the year.
Sowing Divergence: Two States Drag, Two States Grow
The decline in sowing area was mainly driven by Maharashtra and Gujarat. Maharashtra, India's largest cotton-producing state, saw its sowing area fall 6.82% to 3.421 million hectares; Gujarat posted a sharper drop of 9.76%, sowing only 1.675 million hectares. Together, these two states account for over 55% of the national sowing area, and their output cuts directly dragged down the overall figure.
However, Telangana and Andhra Pradesh showed contrasting performance. Telangana's sowing area rose 6.62% to 1.664 million hectares, while Andhra Pradesh surged 34.2% to 275,000 hectares. This regional divergence reflects the direct impact of uneven rainfall distribution on planting decisions—timely rains in southern states provided moisture for cotton, while northwestern states faced drought pressure.
El Niño's Double-Edged Sword: Short-Term Boost, Long-Term Risk
The below-normal rainfall associated with El Niño is not entirely negative for cotton planting. L.K. Gupta, Chairman and Managing Director of the Cotton Corporation of India (CCI), noted that rainfall deficits may actually encourage farmers to shift to cotton, as the crop requires less water than alternatives like soybeans and can still achieve reasonable yields even with low rainfall. Farmers in Gujarat and the Vidarbha region have expressed similar inclinations.
However, El Niño's impact is global. Raja M. Shanmugam, former President of the Tirupur Exporters' Association, warned that if major producing countries (such as the U.S. and Brazil) also suffer output losses due to climate, global cotton supply could tighten, pushing up raw material prices. India's raw cotton imports surged 54.9% year-on-year to $1.89 billion in the 2025/26 fiscal year, while exports fell 33.9% to $436.37 million, indicating rapidly rising import dependence.
Policy Buffer: Tariff Suspension and CCI's Role
To ease supply pressure, the Indian government has suspended the approximately 11% import tariff on cotton until October 2026. This window allows textile manufacturers to replenish raw materials at lower cost, but it is essentially a short-term hedge. More critical is CCI's regulatory capacity—Gupta said CCI is directly supplying cotton to textile mills to reduce trader speculation and may build buffer stocks.
However, not all spinning mills can stockpile for long. Shanmugam suggested that CCI should release reserves regularly at minimum support prices (MSP) and ensure cotton only flows to end-users rather than speculators. Currently, traders backed by foreign capital may amplify price volatility through hoarding.
Transmission to the Textile Chain: Price Stability Expectations and Procurement Strategy Adjustments
Cotton accounts for 80% of fiber consumption and 65% of garment output in India's textile industry, meaning its price fluctuations directly affect the entire chain. The narrowing sowing gap and tariff suspension together provide short-term price stability expectations for textile products. However, global climate risks mean supply remains uncertain until the new crop arrives in January 2026.
For downstream buyers, the next six months represent a window to lock in contracts. If El Niño intensifies before September, international cotton prices may rebound, and domestic Indian prices would follow. Textile mills need to weigh the price difference between imports and local procurement while monitoring CCI's stock release rhythm.