Indian Cotton Consumption Slows

COTTON

Indian cotton consumption has slowed, with garment exporters reporting a sharp decline in orders from the US, which accounts for nearly 29% of India’s textile exports. Last week, India extended its exemptions from import duties on cotton to the end of December in an attempt to help support manufacturers that have been hit by the US tariffs. There was some suggestion that this may result in India importing more cotton from the US, but the sight of Indian PM Modi walking hand in hand with Russian Premier Putin in China over the weekend did not offer much comfort to US cotton sellers. India’s the state-run weather department said over the weekend that the nation is likely to get above-average monsoon rainfall in September after receiving 5% above-normal rains in August, which could damage summer-sown crops such as cotton. World Weather Service said beneficial rain fell last week in the US across the Texas Panhandle, Central parts of West Texas and in the Blacklands. More rain is needed in the southwestern dryland production areas of West Texas, which may not arrive until next week. US Delta crops have dried out greatly, resulting in some crop stress there. There is a chance this afternoon’s Crop Progress report will show a decline in conditions in the Delta, which is about the only region where the crop is not doing well, but the rains in Texas may provide an offset.

COFFEE

December Coffee is lower this morning but still consolidating near contract highs. Rabobank warned last week that December Coffee could see a sharp correction could if the Trump administration were to exempt coffee from the Brazilian tariff or if the US Administration reaches a trade deal with Brazil. However, there has been no mention that either of those events were in the works. Another possibility is that the tariffs overturned. A US appeals court ruled over the weekend that most of the tariffs the administration has issued are illegal. The tariffs will remain in place for now, and the administration is vowing to take this to the Supreme Court. In the meantime, ICE certified stocks continue to fall.

COCOA

December Cocoa was lower overnight, sticking to the downtrend it has been observing since putting in a two-month high in early August. Ivory Coast cocoa arrivals totaled 9,000 metric tons last week, down from 10,000 tons the previous week but up from 8,000 a year ago. Cumulative arrivals for the 2024/25 (October-September) marketing year have reached 1.672 million tons, down 1.9% from 1.704 million a year ago. Ivory Coast farmers interviews by Reuters said they were happy with growing conditions there, as cocoa trees were carrying many fruits of different sizes that will be harvested from September until at least December. Farmers in the west-central region of Daloa and in the central regions of Bongouanou and Yamoussoukro said rains were well below average but that last week was the sunniest in a month. Cool, cloudy conditions have been a concern in recent weeks. World Weather Service says seasonal rains in southern Ivory Coast and southern Ghana are still delayed and no change is likely for at least another week.

SUGAR

October Sugar has been in a sideways pattern for the past week. The International Sugar Organization said on Friday that it expects the 2025/26 (October-September) supply deficit to narrow to just 231,000 metric tons for from a deficit of 4.88 million in 2024/25 sharply, driven by a rise in global production which they expect to increase 3.1% to 180.59 million tons. Consumption is expected increase by a 0.4% to 180.82 million. The Indian government announced today that it  has allowed production of ethanol from sugarcane juice, syrup and all types of molasses without any restrictions on volumes in 2025/26. Last year it restricted ethanol production because of concerns over tight cane supply. This move is an indication India is confident about their cane crop after two good monsoon seasons, Friday’s UNICA report showed Brazilian Center South sugar production recovering during the first half of August, coming in 16% higher than the same period a year ago. Cumulative production for 2025/26 is now running 4.7% behind last year versus being 7.8% behind at the end of July. This is the narrowest the deficit has been since the start of the marketing year in April.

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