India'S 21 Day Cotton Industry Is Facing A "Big Exam"

Affected by the rapid spread of the new crown epidemic in India, India's prime minister Modi announced that India will implement a 21 day blockade from 25 to 0 local time to curb the spread of the epidemic. According to relevant news, during the closure period, all the offices, entertainment places, schools and factories will be shut down. Cotton textile industry, including seed cotton transportation, MSP acquisition, and cotton ginning plants and textile mills, will be affected to varying degrees, resulting in many uncertainties in India's cotton consumption, CCI acquisition progress, import and export, price and so on. What will be the impact of the blockade on India's domestic cotton market?

1, cotton consumption is feared.

Since the beginning of 2011/12, cotton consumption in India is expected to increase year by year. According to the latest forecast data from the US Department of agriculture (USDA) and India Cotton Association (CAI), 533 and 5 million 630 thousand tons respectively. Although the monthly consumption varies periodically, overall, if the deadline is 21 days, the impact on cotton consumption is expected to exceed 300 thousand tons.

2, CCI acquisition is difficult to normal development

According to the relevant statistics, as of the end of this month, the India Cotton Corp (CCI) acquired a total of 1 million 500 thousand tons of cotton seed and cotton lint in MSP. However, affected by the continuous spread of the epidemic in India and the policy of sealing the country, the acquisition of CCI will inevitably be affected. In the case of the impact of the consumption side, the acquisition is blocked by the market, and India's domestic cotton prices will continue to be under pressure.

3. Import and export trade is under impact.

According to foreign media reports, almost all ports in India have issued a statement of force majeure, which mainly includes blockade measures which will lead to unprecedented restrictions on the entry and exit of personnel and materials. The port is not responsible for any damages, damages and costs related to the incident. During this period, there is no limitation on the delay of the ship, but the unloading rate guaranteed in the contract and other port services are not applicable during this period. The resumption of port operation will follow the further instructions of the central government and the state government.

Under such circumstances, the import and export of India's cotton and cotton yarn export trade will be seriously affected. Apart from India's domestic trade, other goods transshipped through India port may also be spared.

4, India cotton price will break new low again.

India cotton has been affected by factors such as relatively low domestic supply and weak operation of the global cotton market. The price of S-6 cotton ginning plant continues to go down this year, and the current price is about 63 cents per pound. Since the outbreak of the new crown disease has been spreading all over the world, India's cotton price has even broken its annual low. However, the 21 day policy of India will directly lead to the disruption of the supply chain of cotton industry, and cotton prices will continue to be under pressure.