According to the latest report from the U.S. Agricultural Counselor, India’s cotton production in 2021/22 is expected to be 27.4 million bales. As the price of seed cotton rises, cotton farmers continue to hold on to cotton and are reluctant to sell it, resulting in increased production costs in the textile industry. At present, India’s export demand for high value-added textiles is strong, and export orders are expected to be good. Exports of cotton, cotton yarn and cotton products remain stable, and domestic cotton consumption is expected to be 26.5 million bales. Despite continued calls from the domestic industry, the Indian government has kept cotton import tariffs unchanged. Rising domestic cotton prices have prompted textile mills to purchase relatively cheap imported cotton.
In the 2021/22 season, India’s cotton planting area is 12.1 million hectares, and the output is 27.4 million bales. Both area and output are lower than USDA forecast. This is because long-term abnormal rainfall in September last year led to a decline in cotton production, which in turn triggered a sharp rise in seed cotton prices. , is currently 44% higher than the MSP price.
According to statistics from the Cotton Corporation of India, as of January 31, 2022, India’s new cotton market volume was 14.26 million bales, accounting for approximately 50% of the expected total output, a year-on-year decrease of 25%, a decrease of 9% from the average of the same period in the past three years, and a year-on-year decrease of 9%. The average over the same period in the past five years has decreased by 2%. Farmgate prices of the S-6 variety in Gujarat have increased by 37% and have increased by 60% since January 2021. Since October 2021, Indian farmers have received good returns, and cotton farmers continue to hold on to cotton and are reluctant to sell.
In 2021/22, India’s cotton consumption is expected to be 26.5 million bales. Industry sources said that India’s cotton consumption has been supported by strong textile and clothing exports and export orders. Currently, Indian textile mills have good profits and are actively investing in expanding production. The industry prospects for the rest of the year are optimistic. Currently, high cotton prices in India and internationally pose a challenge to the country’s industry, with cotton yarn prices rising sharply. From October 2021 to January 27, 2022, the Kotruk A index rose by 22% cumulatively, while the ex-warehouse price of Indian ginners and domestic cotton yarn prices increased by 33%.
In November 2021, India’s textile production increased by 8% year-on-year, and clothing production increased by 33.4%. From April to November 2021, textile and clothing output increased by 47.6% and 28.3% respectively year-on-year. It can be seen from the above data that Indian textile factories have recovered from the epidemic, and factory operating conditions have returned to pre-epidemic levels.
In 2021/22, India’s cotton export volume is expected to be 5.9 million bales. The export volume in December 2021 increased by nearly 57% month-on-month. Bangladesh, Vietnam, China and Indonesia are the main export regions. Bangladesh remains the largest buyer of Indian cotton, accounting for 60% of India’s cotton exports. Exports of cotton yarn and cotton products from India also continue to grow. According to data from the Indian Ministry of Commerce, India’s exports of cotton yarn, cotton cloth and manufactured products increased by 43% year-on-year in January 2022, and exports of ready-made garments increased by 20% year-on-year. In 2021/22, India’s cotton import volume is expected to be 1 million bales. The import volume in December 2021 increased by 21% month-on-month, of which US cotton and Australian cotton accounted for 34% and 28% respectively.
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