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India’s cotton production to touch 29.3 billion in 2020-21: USDA

 

Indias cotton production to touch 29.3 billion in 2020 21A ‘Cotton and Products Update’ report by USDA estimates heavy rains in Central and Southern India will impact the quality of the cotton yield this year. India’s cotton production is expected to reach 29.3 million 480-lb bales in marketing year (MY) 2020/21. The First advance estimates for 2020-21, published by the Ministry of Agriculture and Farmers Welfare’s (MOAFW), estimate national average yields to be around 491 kg per hectare.

On September 21, the Committee on Cotton Production and Consumption (COCPC), published revised estimates for MY 2018/19 and MY 2019/20. And as per revised estimates, cotton production in MY 2019/20 is estimated at 27.9 million 480 lb. bales. As of October 22, new crop arrivals of long staple variety cotton in Punjab, Haryana and Rajasthan reached 1.5 million 170 kg bales. The Cotton Corporation of India is procuring supplies in these states at 5-6 percent higher prices than current market rates. It has commenced procurement under the MSP program from the northern Indian states of Punjab, Haryana, and Rajasthan.

Cotton consumption to reach 22.7 million bales

Under the MSP program, the Indian government aims to procure 12.5 million 170-kg bales of seed cotton in MY 2020-21. Cotton consumption in MYIndias cotton production to touch 29.3 billion in 2020 21 USDA 2020/21 is likely to reach around 22.7 million 480-lb bales, claims USDA. In October, cotton yarn prices increased by 2.3 per cent, while fiber prices rose by eight per cent. Though mill buying and mill consumption has improved due to new export orders, domestic retail demand remains subdued. For August 2020 IIP estimates textile manufacturing to have declined by 16 per cent as compared to August 2019. Cumulatively, textile manufacturing declined by 49 per cent during fiscal year 2020-21 (April/August) as compared to 2019-20.

Raw cotton exports increase 54 per cent

Highest cotton exports since MY 2011-12 were recorded in the months of August and September 2020. As per FAS analysis, exports of raw cotton increased by 54 per cent in September as against the previous month. Top export destinations were Bangladesh, China and Vietnam. Of these, shipments to Bangladesh constituted 40 per cent of the total volume. Cotton fabrics export grew 25 per cent in volume terms in September. Top destinations were: Australia, Korea, Sri Lanka and the United States.

Cotton yarn/fabrics exports increase 15 per cent

Ministry of Commerce estimates, exports of cotton yarn/fabrics/made-ups, handloom products to have increased by 15 per cent in value in September 2020 as compared to the same period last year. However, the cumulative value of these exports between April-September declined 20 per cent, compared to same period last year. Similarly, exports of readymade garments increased 10 per cent in September. The cumulative value of exports from April – August fell by 40 per cent compared to the same period last year.

An opportunity to tap the Australian market

Freight rates for October have risen sharply from $300 to $800, particularly for Middle Eastern, European, North and South American ports. Availability of containers has worsened even at major ports like Mundra and Nhava Sheva (Mumbai), while the situation at inland container depots is worse.

The USDA report says, United States, Egypt, and Mali are top cotton suppliers in 2020. Almost 57 per cent of their cotton has been shipped to Tuticorin port for mills in Southern India. Meanwhile Chinese mills have either lowered or ended their use of Australian cotton, presenting India with an opportunity to increase its share in the Australian cotton market.

 
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