Overview of Indian Cotton Textile Market

The latest report of the U.S. Agricultural Counselor stated that India’s cotton production in 2017/18 is expected to be 6.096 million tons and the planting area is 165 million mu. The yield is expected to be lower than last year, but higher than the average of the past three years. India's domestic cotton consumption is expected to decrease. Although the export volume of cotton yarn in December 2016 hit the highest level in nearly a decade, the fact that the demand for cotton yarn has fallen since the monetary policy cannot be changed. India’s cotton exports and imports are expected to be 980,000 tons and 326,000 tons, respectively.　　 In 2016/17, the price of seed cotton in India rose by 18% year-on-year, while other crops yielded poor returns. Even if the government encourages the cultivation of legumes, farmers still tend to grow cotton. If this year’s monsoon rains are normal, the cotton yield is expected to be 36.9 kg/mu, slightly lower than this year’s 37.3 kg, but higher than the three-year average of 35.6 kg.　　 In 2017/18, India’s cotton consumption is expected to be 5.117 million tons. Due to the sufficient supply of domestic cotton, it is expected that Indian cotton and cotton yarn prices will remain competitive next year. The textile industry has improved performance compared with previous years, and textile production capacity has continued to expand. However, under the influence of monetary policy, textile workers in southern India will return to their hometowns. As a result, nearly 20% of the factories closed and stopped production. In general, China's imports of cotton yarn from India this year have remained relatively high, while exports of Indian cotton fabrics and finished products (blankets, bed sheets, finishing fabrics, etc.) have declined. The report predicts that the average monthly cotton consumption in India in 2017/18 will be 410,000 tons, a slight increase from 403,000 tons this year.　　 In recent years, many small textile mills have newly opened in India, and their products are both pure cotton and blended. On the whole, the proportion of cotton used in Indian textile mills is still as high as 70%, and the proportion of chemical fiber is 30%. However, due to unstable cotton prices, weak demand, and low chemical fiber prices, the production of Indian textile mills will shift more to blending and the use of waste cotton.　　 Since October 2016, the domestic cotton price in India has fallen by 3%, but the Kotruk A index has risen by 12%, making the Indian cotton ex-factory price and the international cotton price basically the same. However, Indian factories recently imported a large amount of foreign cotton, mainly Australian cotton and American cotton, because of low impurities, good spinnability and poor quality of domestic new cotton. The sharp rise in the exchange rate of the Indian rupee against the US dollar has greatly affected the export of Indian products and the export competitiveness of Indian cotton. For the remainder of this year, Indian cotton export demand will remain sluggish.　　 Since November 2016, India’s domestic demand for cotton yarn has weakened, and textile mills have begun to export cotton yarn. At present, Indian cotton yarn is mainly exported to China, Bangladesh and Pakistan. In December 2016, India's cotton yarn exports reached 173,000 tons, of which 60% were exported to China. In 2017/18, India’s cotton export volume is expected to be 980,000 tons. In the case of a sharp drop in Chinese demand, Indian cotton merchants and exporters have begun to move to other markets such as Indonesia, Taiwan, Turkey and Thailand, but their main battlefield is still It is Pakistan and Bangladesh. China’s share of India’s cotton exports has fallen from nearly 80% in 2011 to 10% in 2015, while the share of Pakistan and Bangladesh has risen from 14% to more than 70%. Some analysts say that China's cotton yarn imports from India will increase in the future, while cotton imports will decrease. According to data from the Office of the Indian Textile Commissioner, from August 2016 to January 2017, India’s cotton stocks were the lowest since 2011/12. The Indian government’s currency policy has had an impact on large and medium-sized textile mills. It is difficult for factories to sell cotton yarn stocks. Replenishing cotton stocks puts the factories that have been forced to reduce production to deal with the problem of increasing stocks into greater difficulties. Recently, Indian factories have shown signs of restocking, but the current overall inventory level is still about 13% lower than the five-year average. With the increase in cotton yarn export demand, India's cotton yarn inventory increased significantly from August to December last year.　　According to the statistics of Indian Cotton Company, as of the end of March, the progress of India's new cotton market has reached 78%, and the total amount has exceeded 4.5 million tons. Up to now, the Indian Cotton Company has not purchased at MSP price, but has purchased 17,000 tons of new cotton at market price, and plans to purchase 240 to 330,000 tons at market price to support the production of domestic small textile factories. Article keywords: 　Indian cotton spinning overseas textile