The Cotton Association of India recently raised its forecast for India’s cotton production in 2019/20 by 1.9 million bales (170 kg per bale). However, India’s domestic consumption has been reduced by 3 million bales to 25 million bales, and the total supply is about 40.25 million bales. The serious lag in consumption has made it difficult to digest the huge cotton inventory in India.
Commodity analysts said that the new crown epidemic has had a huge impact on cotton consumption in India. The price of cotton in India is now lower than international levels, but demand is not high. In order to stimulate demand, CCI has been offering bulk discounts to factories recently, but since the production capacity of spinning mills is around 75%, demand has not accelerated yet. Commodity experts say end consumer demand needs to pick up in Europe, the Middle East and the United States. At present, wholesale trade in India sells shirts at 50% price. In some areas, a shirt priced at 500 rupees is now priced at 200 rupees.
Currently, India’s new cotton crop will be available at the end of September/early October, and the output may be higher than this year because sowing volume has increased by 3.20%. As of August 14, India’s cotton planting area was 1.2548 million hectares, compared with 1.2158 million hectares in the same period last year.
In the past week, India’s CCI export quotations have begun to increase, with the basis spread of various varieties at a discount of 250-400 points. International cotton merchants have made many purchases, but the basis has suddenly strengthened in recent days. It is understood that a large-scale pest infestation has recently broken out in India. The subsequent spread will depend on when the monsoon rains end and the progress of the harvest. If the harvest is extended to next year and 3-4 pickings are required before and after, the spread of pests will definitely be very serious. Last week, the domestic S-6 spot price in India rose to more than 57 cents.
CCI sold about 800,000 bales of cotton during the recovery of ICE futures last week. CCI and Mabon have sold more than 4 million bales cumulatively. CCI announced that textile mills will also enjoy discounts for small-volume purchases from August 16 to 31, which is 1,500 rupees per kand, which is the same as the discount for purchases of more than 200,000 bales. This discount is available even if the purchase volume is as low as 500 bales, and according to the purchase There is still a 30-90 day payment period. The 4 million bales of cotton in stock that CCI previously sold are now difficult for cotton merchants to sell to domestic textile mills. These high-priced cotton can only be pushed to the export market.
<br
