Cotton Association of India Projects 14% Drop in 2026-27 Output Due to Drought and Lower Acreage

India’s cotton production for the 2026-27 season, which began in October, is estimated to decline by around 14 per cent to 280 lakh bales of 170 kg each. This is a drop from the 325.69 lakh bales recorded last year, according to the first estimates released by the Cotton Association of India (CAI).

Lower acreage and drought in key producing states have affected output this year. According to the first estimate and balance sheet for the 2026-27 season prepared by the CAI Crop Committee, total supply is estimated at 417.88 lakh bales. This comprises opening stocks of 72.88 lakh bales and imports of 65 lakh bales.

The CAI has projected imports at 65 lakh bales, which is marginally lower than last year's 71.6 lakh bales. The government recently extended the duty exemption on cotton imports until December-end. Meanwhile, consumption is estimated to remain flat at 365 lakh bales, while exports are projected to decline to 12 lakh bales from 15 lakh bales last year. The trade body expects closing stocks to fall to 40.88 lakh bales as of September 30, 2027, from 72.88 lakh bales a year earlier.

Regional data shows varying trends across different zones. Cotton production in the North Zone, comprising Punjab, Haryana, and Rajasthan, is estimated at 28 lakh bales in 2026-27, marginally higher than the 27 lakh bales recorded last year. Punjab's output is projected at 1.25 lakh bales, slightly lower than last year's 1.5 lakh bales. Haryana is expected to produce 8 lakh bales against 6.5 lakh bales, while Upper Rajasthan's output is projected at 11.25 lakh bales against 11 lakh bales. Lower Rajasthan is estimated to produce 7.5 lakh bales, compared with 8 lakh bales last year.

In contrast, the CAI has pegged production in the Central Zone at 176 lakh bales, significantly lower than last year's 199.35 lakh bales. This decline is mainly due to reduced output in Maharashtra, which has been affected by drought. Maharashtra's output is projected at 91 lakh bales against 113.35 lakh bales last year. Gujarat is expected to produce 66 lakh bales, marginally lower than 68.5 lakh bales, while Madhya Pradesh's output is projected to rise to 19 lakh bales from 17.5 lakh bales.

Output in the South Zone is estimated at 71 lakh bales in 2026-27, down from 93.84 lakh bales last year. Telangana's production is projected at 34 lakh bales against 42.1 lakh bales last year. Andhra Pradesh is expected to produce 12 lakh bales, compared with 19.8 lakh bales, while Karnataka's output is estimated at 20 lakh bales against 26.94 lakh bales. Tamil Nadu's production is projected to remain flat at 5 lakh bales.

Additionally, Odisha's cotton production is estimated at 3 lakh bales, against 3.5 lakh bales last year. Output in other states is projected to remain unchanged at 2 lakh bales.

"A 14 percent contraction in cotton output driven by drought and lower acreage highlights significant supply-side pressures for the textile and agricultural sectors. With consumption remaining flat and closing stocks expected to drop sharply, businesses in the supply chain must carefully manage inventory costs and factor in import dependencies, especially with the government's duty exemptions in place." — Dr. Shishir Gupta, Founder & CEO, StartupLanes