The latest report from the U.S. Agricultural Counselor stated that India’s cotton output in 2020/21 was 29.3 million bales, with a cotton planting area of 13 million hectares. Heavy rains in central and southern India are expected to adversely affect cotton quality and overall yields. Currently, India’s 2020/21 new cotton MSP acquisition has begun. The surge in India’s cotton exports and cotton product exports has stimulated cotton consumption and prompted domestic cotton prices to rise. Cotton consumption is expected to be 22.7 million bales.
According to the situation announced by the Indian Meteorological Department, excessive rainfall in major cotton-producing areas such as Maharashtra, Gujarat, Telangana and Andhra Pradesh caused cotton fields to be soaked by floods, which affected the growth of cotton. bring very adverse effects. Flowering and boll numbers may be reduced due to excessive soil moisture. Official data shows that rains in October affected 370,000 hectares of cotton fields in Telangana state.
As of October 22, the new cotton market volume in northern India has reached 1.5 million bales (170 kg/bag). The price of seed cotton has increased by 2% since October, but is still lower than the market in the same period last year. Price and MSP price. Cotton Corporation of India is buying in three states at prices 5-6% higher than the market price. Because the market price is not ideal, many cotton farmers choose to delay the delivery of new cotton and wait for the price to rise later. Moreover, due to rising labor costs this year, cotton farmers may reduce the number of pickings.
At this stage, India CCI’s MSP acquisition volume is limited, with a total of 300,000 bales purchased in three states. It is expected to start purchasing in the central region from the end of October to the beginning of November. Due to the delayed withdrawal of monsoon rains, the quality (color grade, length and strength) of new cotton in the central region will be affected. According to market sources, under the MSP plan, the Indian government plans to purchase 12.5 million bales of seed cotton this year, a year-on-year increase of nearly 19%. The total MSP acquisition expenditure is expected to be approximately US$4.8 billion. As of October 23, the total amount of cotton in CCI’s unsold inventory and other government channels was around 5.3 million bales.
In 2020/21, India’s cotton consumption is expected to be 22.7 million bales, 300,000 bales lower than USDA’s official forecast. In October, cotton yarn prices in India rose by 2.3% and cotton prices by 8%. Increased exports of Indian cotton yarn to Bangladesh, China and Vietnam have prompted textile mills to operate at basically full capacity. Although the increase in orders from Europe and the United States in the past few months has led to a recovery in Indian textile mill purchases and cotton consumption, domestic retail demand in India remains sluggish. Moreover, with the second wave of epidemics in Europe and the United States now fierce, Indian cotton yarn export orders may flow to other countries.
The report estimates that India’s cotton export volume in 2020/21 will be 4.7 million bales, 300,000 bales less than the official USDA forecast. Although India has a bumper cotton harvest this year, export supply is surplus and foreign demand has recovered, fierce competition in other regions may affect India’s cotton export growth. In October this year, the ex-warehouse price of domestic ginners in India increased by 8%, consistent with the Kotruk A index, because the market expected a decrease in the quantity of high-quality cotton this year and an increase in foreign demand. According to forecasts, India’s cotton export volume from August to September this year is the highest level in the same period in the past ten years. The export volume in September increased by 54% month-on-month, the cotton yarn export volume decreased by 9% month-on-month and increased by 37% year-on-year, and the cotton cloth export volume increased by 25% month-on-month. %, a year-on-year increase of 32%. </p
