According to feedback from domestic ginners and cotton exporters in India, affected by holidays such as Holi and Eid, the market volume of Indian seed cotton and lint cotton has decreased recently, and CCI’s purchases in major cotton-producing areas have continued to decline or even stagnated. According to statistics, as of March 24, CCI had purchased a total of 1.562 million tons (approximately 9.1894 million bales) of seed cotton in 2020/21 at MSP prices.
Cotton traders in Gujarat, Mumbai and other places believe that due to the CCI sales floor price only rising but not falling, domestic cotton consumption demand in India has recovered strongly, and Indian farmers will adjust their planting structure in 2021. (Increased planting of soybeans, corn, etc.) has intensified people’s concerns about the decline in cotton production. The purchase price of private cotton ginning companies will stabilize above the MSP minimum price. Therefore, there is a high probability that CCI purchases will be priceless from April to July. This year’s CCI accumulation The purchase volume is not only lower than the 11-12 million bales previously predicted by CAI, CCI and other parties, but may also be lower than the 9.8 million bales estimated by some international cotton merchants and Indian cotton companies. A large amount of Indian cotton resources in 2020/21 flow into private ginning companies and traders, which is beneficial to the domestic sales and export of Indian cotton.
USDA’s latest monthly report estimates that India’s cotton exports in 2020/21 will be 1.241 million tons. Although this is an increase of 152,000 tons from February, most international cotton merchants and Indian Cotton companies believe that the forecast is low, and the final actual export volume is expected to reach 1.4-1.5 million tons. CAI predicts that India’s cotton export volume this year will be 6 million bales (about 1.02 million tons, 600,000 bales higher than the previous forecast), an increase of 1 million bales from 2019/20. Obviously, it is not only significantly lower than the USDA and ICAC data, but also significantly lower than the USDA and ICAC data. It is lower than the predictions of Indian cotton-related enterprises and international cotton merchants.
The author believes that Indian cotton exports will improve from April to October 2021, and the factors that will seize the market share of US cotton, Brazilian cotton, and West African cotton mainly include the following points:
First, the contracted exports of U.S. upland cotton in 2020/21 are close to the “oversold” state. Circulable U.S. cotton resources are basically monopolized by several large international cotton merchants and import companies, while Indian cotton There are more “primary sources”; second, since 2020/21, Indian cotton has a stronger cost-effectiveness advantage compared to its main competitors, Brazilian cotton and US cotton; third, there is news that Pakistan has not only liberalized the import of Indian cotton and cotton yarn , and there is no specific quantity limit. From the perspective of yarn quality, specifications, and competitiveness, high-quality American cotton and Brazilian cotton are not suitable. Medium-low quality, index Indian cotton is the best choice; fourth, the first stage of China-U.S. The trade agreement will still be fully implemented, so the demand of Vietnam, Bangladesh, Indonesia and other countries can only be forced to shift to high-quality and cheap Indian cotton; fifth, affected by widespread and continuous rainfall and a sharp decline in planting area, from 4 to 10 2021 Australia, Brazil and other countries did not put much pressure on Indian cotton exports in March; sixth, the epidemic in Europe and the United States has returned, coupled with the “big ship jam” in the Suez Canal, Southeast Asia, East Asia (including China) and other enterprises purchasing Indian cotton not only have short transportation distances, but also have high freight costs. It is low, has many containers, and has less pressure to import the epidemic. </p
