The highly competitive prices of Indian cotton fibres in the global market coupled with the increasing export demand for cotton yarn and textile products will cause India’s domestic cotton consumption to rise in market year (MY) 2021-22. Cotton imports have also been rising due to a strong demand from cotton mills to fulfil their export orders.
The area of cotton harvested is expected to move down as the area under Rabi crop in South India is increasing. Despite the decrease in cotton harvest and damage due to excessive rains, the cotton production is expected to rise due to high seed cotton prices. Farmers are also willing to keep the crop on the field longer for better price realisation.
In addition, new minimum support price (MSP) has been increased by 3.80 per cent and 3.40 per cent for medium staple cotton and long staple cotton, respectively.
Cotton area harvested in India was 13.40 million hectares in MY 2019-20, which dropped by 2.99 per cent to 13 million hectares in MY 2020-21, according to Fibre2Fashion’s market analysis tool TexPro. It is expected to decline further by 4.62 per cent to 12.40 million hectares in MY 2021-22.
The country produced 28.80 million 480 lb bales in MY 2019-20 and 27.90 million 480 lb bales in MY 2020-21. However, it is expected to rise slightly by 0.36 per cent to 28 million 480 lb bales in MY 2021/22.
The country’s cotton imports went down by a whopping 62.72 per cent from 2.28 million 480 lb bales in MY 2019-20 to 0.85 million 480 lb bales in MY 2020-21, as per TexPro. It is expected to rise again by 17.65 per cent to reach 1 million 480 lb bales in MY 2021-22.
As for the cotton exports, India exported 3.20 million 480 lb bales in MY 2019-20, which rose by 93.75 per cent to 6.20 million 480 lb bales in MY 2020-21. It is expected to remain the same in MY 2021-22.
Coming to the consumption of cotton in the country, it will go from 20 million 480 lb bales in MY 2019-20 and 24.20 million 480 lb bales in MY 2020-21 to 26 million 480 lb bales in MY 2021-22.