Overview of Indian Cotton Textile Market

According to the latest report from the U.S. Agricultural Counselor, India’s cotton planting area in 2020/21 was 13.3 million hectares, with a production of 29.3 million bales. Cotton prices in India have risen…

According to the latest report from the U.S. Agricultural Counselor, India’s cotton planting area in 2020/21 was 13.3 million hectares, with a production of 29.3 million bales. Cotton prices in India have risen due to strong export demand for cotton and cotton yarn. Since the market price of seed cotton is lower than MSP, cotton farmers continue to sell seed cotton to CCI at MSP price. At present, India’s textile cotton consumption has steadily rebounded, but it remains at 23 million bales this year due to sluggish domestic demand.

According to report analysis, continuous rainfall and increased insect infestation during last year’s harvest season led to a decline in yields. Unofficial estimates indicate that the actual output may be between 27 and 29 million bales. As of December 25, 2020, India’s MSP cotton purchase volume reached a total of 5.26 million bales (1.14 million tons) worth US$2.66 billion. It is reported that the total MSP acquisition expenditure this year was US$4.72 billion. However, due to poor quality, the government Acquisition volumes may be limited.

According to CCI statistics, as of December 28, 2020, the volume of new cotton on the market in India is expected to be 11.8 million bales (2.6 million tons). The current listing progress is still very fast, and cotton farmers are actively selling seed cotton to CCI. , but the market price in some areas such as Gujarat, Andhra Pradesh and Rajasthan is already higher than the MSP due to strong demand from local textile mills.

According to statistics, the total amount of unsold government stocks and private cotton merchants’ stocks in India is 9.4 million bales (2 million tons), of which the government stocks in 2019/20 (about 510,000-680,000 tons) The quality is significantly better than the new cotton currently on the market. Therefore, textile mills are more willing to purchase old cotton, but the price is significantly higher than that of new cotton. Since this year (October 2020), the price of seed cotton on domestic farms in India has increased by 21%, and the current price is 7% higher than last month.

From a consumption perspective, although the export demand for floral gauze in India is currently strong, overall the country is still working from home and under lockdown. Domestic cotton consumption is in a sluggish state, recovery is relatively slow, and the entire supply chain has Financial pressure is great, and manufacturers are maintaining a buy-as-you-go strategy. Cotton consumption in India may not return to pre-epidemic levels before the second quarter of 2021.

In 2020/21, India’s cotton export volume is expected to be 4.8 million bales (1 million tons). However, affected by the outbreak of the epidemic in the consumer market, the pace of export shipments is slow. Since October 2020, the spot price of cotton in India has increased by 13%, which is lower than the 16% increase in Kautluk during the same period. The shrinking global demand for cotton has intensified competition in cotton exports. The competition between Indian cotton, Brazilian cotton and Australian cotton has become more intense.

Since October 2020, the price of Indian cotton yarn has increased by 20%, with main demand coming from China, Bangladesh, Peru, Portugal and Vietnam. Vietnam’s Ministry of Commerce initially estimates that cotton yarn export volume in November will increase by 4% month-on-month and decrease by 1% year-on-year. From August to November, India’s cotton yarn export volume will increase by 20% year-on-year. Cotton cloth export volume in November increased by 3% month-on-month and 10% year-on-year. Cotton cloth export volume from August to November increased by 6% year-on-year. </p

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