The latest forecast from the Indian Cotton Association shows that India’s cotton output in 2020/21 will be 35.85 million bales (about 6.0945 million tons), and the total annual supply will be 49.75 million bales, of which domestic consumption will be 33 million bales (a year-on-year increase of 8 million bales) ), with an export volume of 5.4 million bales (about 918,000 tons). USDA’s latest monthly report shows that India’s cotton production and export volume in 2020/21 were 6.423 million tons and 1.089 million tons respectively, both significantly higher than CAI’s forecast data. Some private cotton processing companies and traders in Gujarat, Maharashtra and other places believe that CAI’s data is relatively more accurate, and it is unlikely that India’s total cotton exports will exceed 1 million tons in 2020/21.
What factors will restrict India’s cotton exports in 2020/21? Indian cotton companies and international cotton merchants summarized the following points:
First, with the support of MSP purchase price, CCI has significantly increased the price of cotton in 2020/21 while controlling the rotation of cotton. The shipping schedule of Indian cotton from February to April The price difference between the quotation and Brazilian cotton and US cotton has narrowed to 3.5-4.5 cents/pound, and export competitiveness continues to weaken;
Second, India’s 10% tariff on cotton imports has stimulated the rise in Indian cotton prices, although it has helped Domestic consumption is not conducive to cotton FOB and CNF export quotations;
Third, the appreciation pressure of the Indian rupee will be prominent in 2021, which is not conducive to the export of cotton, cotton yarn, etc. According to reports, after 15 hours of negotiations, the U.S. House of Representatives forcibly passed a $1.9 trillion stimulus package, which will then go to the Senate for a vote. In this regard, the Indian minister stated that “the rupee is facing huge appreciation pressure”;
Fourthly, the growth momentum of the domestic epidemic in India has weakened, and prevention and control has achieved results. Textile and clothing companies have fully resumed work and production since the third and fourth quarters of last year. In addition, a large number of European and American epidemics have , the retaliatory growth of orders in the Middle East. Not only has cotton consumption demand in India rebounded significantly, but the prices of cotton yarn, gray fabrics, etc. have also skyrocketed. The profits of yarn mills have rapidly improved, and their ability to withstand and digest cotton prices has increased. This momentum will continue for another year;
Fifth, from the survey, in the past two years, yarn mills in Vietnam, Pakistan, Bangladesh and other countries have gradually increased their purchases of Brazilian cotton and African cotton. On top of that, indicators such as Indian cotton ginning, impurities, and packaging are still poor. Therefore, except for U.S. cotton, , the substitution of cotton produced in other countries for Indian cotton is also increasing.
Cotton textile enterprises in Henan, Shandong and other places reported that in 2019/20, due to various factors such as weather, cotton species, and epidemics in Gujarat, S-6 cotton planting area, total output, and lint quality declined significantly, resulting in high spinnability. The supply of S-6 has been significantly reduced, which does not match the actual demand of my country’s large and medium-sized textile enterprises. Therefore, domestic enterprises have turned to contracts to purchase Brazilian cotton, US cotton, and West African cotton. </p
