According to the latest report of the U.S. Agricultural Counselor, India’s cotton planting area in 2020/21 is 13 million hectares, and cotton production is 29.3 million bales. Recently, there have been more and more reports of pests in various states, but most of them are isolated cases. . Affected by the surge in government purchases and increased exports of raw cotton and cotton products, Indian cotton prices have risen. Domestic textile cotton consumption is expected to remain stable at 22.8 million bales, as the new round of blockades will continue to affect consumer purchasing behavior.
At present, the new cotton harvest in India is underway in various states. After heavy rainfall in the early stage, bollworm and boll rot appeared in cotton fields. According to the latest official statistics, as of November 23, India’s MSP purchases have reached 1.77 million bales worth US$917 million, benefiting 453,000 cotton farmers. CCI statistics show that as of November 24, the cumulative volume of new cotton in India has reached 5 million bales, the highest in the same period in the past five years. The price of seed cotton has increased by 19% since October, but is still lower than the MSP, prompting cotton farmers to speed up sales to CCI. As of November 25, the inventory of unsold old cotton in private channels was around 2.7 million bales. Together with the government’s inventory, the total inventory was 12.5 million bales.
In 2020/21, India’s cotton consumption is expected to be 22.8 million bales. Although Indian textile production and sales have gradually emerged from the epidemic and blockade, they have not yet returned to pre-epidemic levels, and industry liquidity remains The situation is very tense, and factories generally still maintain the strategy of buying as they are used. The raw material inventory of small and medium-sized textile enterprises is 45 days, which can be used until the end of December. The inventory of larger factories is about 65 days, and the current procurement speed has slowed down.
The current decline in global cotton demand has made Indian cotton exports face greater challenges. Although the recent recovery in demand has led to an increase in yarn prices in the short term and increased factory profits, in the medium term (the next 1-3 years) demand Growth will be driven by high demand for blended gauze, especially for medical and personal protective clothing. Due to the current epidemic situation in India, domestic clothing retail demand in India is still sluggish. The reopening of the retail market in the past two months, holiday consumption and the promotion of the winter wedding season have stimulated an increase in clothing demand. However, the number of confirmed cases of the new crown continues to increase and the government may again Imposing a lockdown will limit consumption, leading to a slow recovery in cotton demand.
In 2020/21, India’s cotton export volume is expected to be 4.7 million bales. Although there is a year-on-year increase, export progress is relatively slow due to the impact of the epidemic. Since October, the ex-factory price of cotton gins in India has increased by 9%, which is close to the Kotruk A index (10%). The expected reduction in the supply of high-grade cotton and the increase in demand have prompted the recovery of cotton prices. However, Indian cotton is still one of the lowest-priced varieties in the world, and cotton exports increased by 18% month-on-month in October.
At the same time, Indian cotton yarn prices also rose by 12% in October due to increased demand for foreign yarn. India’s Ministry of Commerce said that although export volume in October fell by 5% month-on-month, it increased by 12% year-on-year. Since 2020/21 (August-October), India’s cotton yarn exports have increased by 29% year-on-year.
Forecasts from the Indian Ministry of Commerce show that India’s exports of cotton gauze and cotton fabrics and handloom products increased by 7% year-on-year in October, but cumulative exports from April to October decreased by 16% year-on-year. Exports of cotton garments increased by 6% year-on-year in October, but exports from April to October fell by 34% year-on-year. Exports of man-made fiber products also fell by 13% in October, and the cumulative decline from April to October was 35%. </p
