India's cotton production forecast is lowered, yarn production recovers

According to the latest forecast of the Indian Cotton Advisory Board (CAB), this year’s cotton production in India was 5.865 million tons, a decrease of 187,000 tons from the November forecast, due to the decline in cotton yields and the continued lower market volume of new cotton than the same period last year. However, this year's cotton exports have been adjusted to 1.428 million tons, an increase of 68,000 tons from the previous forecast, due to the increase in China's import demand. So far this year, India has shipped 748,000 tons of cotton.
Due to the increase in yarn import demand from China, Sri Lanka, Bangladesh, Vietnam and Egypt, India's domestic cotton consumption has been adjusted from 3.57 million tons to 3.67 million tons. Analysts believe that this is a signal that the Indian textile industry is beginning to recover. In December 2011, the number of registered yarn exports from India was 83,000 tons, a month-on-month increase of 8%. The number of registered cotton yarn exports in the first nine months of this fiscal year was 623,800 tons. Due to the increase in foreign demand and the decline in the production of balsa yarn, it is expected that India's cotton yarn exports in January 2012 will continue to maintain a strong growth momentum. In addition, affected by lower production forecasts, India's domestic cotton prices have strengthened recently.