With increasing concerns about global climate change, along with other CO2 mitigation measures, waste management is also being critical worldwide. On average, one-third of waste generated globally is food/organic waste, with high environmental hazards and low recycling rates globally. In this study, food waste and agricultural wastes were comprehensively studied in the perspective of solid fuel production by hydrothermal carbonization technology. This study investigates the suitability of food waste and cotton straw as feedstocks for hydrothermal carbonization aimed at producing high-quality solid bio-fuel. Municipal solid waste characterization in Tashkent revealed that food waste consistently represents the largest fraction of household waste (47–52 wt%), with total biodegradable organics exceeding 54 wt%, confirming its steady availability for thermochemical valorization. Structural carbohydrate analysis showed that food waste is rich in cellulose (45.22 ± 2.1%), hemicellulose (29.39 ± 1.8%), and lignin (25.47 ± 1.5%), forming a balanced lignocellulosic matrix favorable for hydrothermal carbonization reactions. Proximate analysis demonstrated significantly higher volatile matter (77.79 wt%) and lower ash (6.97 wt%) in food waste compared to cotton straw, alongside an High Heating Value of 23.18 MJ/kg, indicating strong potential for generating energy-dense hydrochar comparable to sub-bituminous coal. Food waste demonstrated superior characteristics for hydrothermal carbonization compared to cotton straw, with 34% higher volatile matter and 70% lower ash content. Thermogravimetric analysis revealed a multistage decomposition pattern involving moisture evaporation, primary and secondary pyrolysis, and high-temperature gasification, with activation energy trends consistent with the sequential degradation of hemicellulose, cellulose, and lignin. Kinetic analysis revealed lower activation energy for FW pyrolysis (50.7 kJ/mol primary stage) versus cotton straw (122 kJ/mol), suggesting more favourable conversion energetics. FTIR analysis of both food waste and cotton straw confirmed dominant oxygenated functional groups (O–H, C–H, C=O, and C–O), supporting the expected hydrothermal carbonization pathways of dehydration, decarboxylation, and aromatization that contribute to carbon densification. Overall, the integrated physicochemical, thermal, and spectroscopic characterization establishes FW as a highly suitable and abundant feedstock for hydrothermal carbonization-based bio-coal production, either as a standalone substrate or as a co-feed with agricultural residues such as cotton straw.