According to reports from some cotton-related companies in Maharashtra, Gujarat and other places, since 2021/22, the raw material procurement trend of some Indian yarn mills has been very obvious to “reduce cotton and increase chemical fiber”. Polyester-cotton yarn, polyester-viscose yarn, pure polyester yarn , rayon yarn and other output growth momentum is very strong, to a certain extent, weakening the consumer demand for cotton by cotton mills.
The industry expects that as Indian cotton enters the market at high prices in 2022/23, the impact of the US/EU ban on Xinjiang cotton product imports accelerates the spillover, and changes in consumption habits in developed and developing countries, Indian yarn mills will switch to blended yarn and chemical fiber yarn. The trend may be irreversible, and the progress of polyester staple fiber and viscose staple fiber replacing cotton will continue to accelerate.
According to statistics, most of the world’s chemical fiber production is still concentrated in mainland China, India, Western Europe, the United States, Taiwan, and Japan. In 2020, India’s chemical fiber production accounted for 8% of the global total production, and mainland China accounted for 73% of the global total production. , India is less than 1/9 of China.
Why are Indian cotton mills accelerating the “de-cottonization”? Industry analysis mainly includes the following three factors:
First, since 2021/22, India’s domestic cotton prices have “opened high and skyrocketed”, ascending to the “throne” of the world’s most expensive cotton, resulting in a sharp decline in profits or even losses for cotton mills; coupled with the Federal Reserve’s continued aggressive interest rate hikes and high inflation, new orders for cotton textile and apparel in the United States and Europe are shrinking rapidly, and spinning mills are switching to blended yarn and chemical fiber yarn from the perspective of cost reduction and risk reduction.
Second, as of now, the output of blended yarn and chemical fiber yarn in Southeast Asian and South Asian countries is still relatively low (except for some output of Indonesian polyester and cotton yarn, which is mainly limited by the level of equipment and technology, and the operating capabilities of employees). In recent years, cloth factories, However, consumer demand from fabric and clothing companies continues to grow significantly. Therefore, the market prospects for Indian yarn mills to switch to blended yarn and chemical fiber yarn are relatively bright compared to cotton yarn.
Third, the global consumer demand for cotton textiles and cotton clothing has been affected by multiple factors such as the rising risk of economic recession in the United States, Europe and the world, sanctions triggered by the Russia-Ukraine war, counter-sanctions that have pushed up energy and other commodity prices, and the recurrence of epidemics. The market continues to decline, and chemical fiber products that are relatively cheap, durable, and easy to care for are favored by consumers.
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