India's cotton markets experienced downward pressure during the fourth quarter, influenced by the government's extension of duty-free import provisions. Quarterly import volumes reached record levels, rising compared to the prior year as textile mills shifted procurement toward cheaper overseas sources offering better quality fibre. This import activity coincided with domestic production challenges stemming from adverse weather conditions across major growing states, including Maharashtra, Gujarat, Andhra Pradesh, and Telangana, where heavy and unseasonal rainfall damaged crops and pushed output to its lowest level in over a decade and a half. Despite reduced domestic availability, prices declined as duty-free access created cost advantages for imported material.
Domestic spot prices moved downward in alignment with international benchmarks, creating gaps between market realizations and officially announced minimum support prices. Cotton Corporation procurement operations expanded across multiple states and districts, though delayed contract finalization with ginning units limited immediate intervention. Farmer distress intensified as arrivals accelerated while spot prices remained depressed, forcing sales below support thresholds. The textile industry faced pressures from elevated import competition and contracting export orders following tariff increases by a key destination market, resulting in reduced domestic consumption forecasts.