Cotton Prices Farmers In India Face New Pressures

2020/6/22 11:41:00 1

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India farmers plan to record a record number of cotton this year, which will put additional pressure on the cotton price that has already been hit by the new crown epidemic.

India's Ministry of agriculture data showed that as of June 12th, the cotton growing area of the world's largest cotton producer increased by 23% over last year. They were encouraged by the cotton purchase price raised by the government to support farmers who suffered losses in the past two months.

Since the beginning of this year, global cotton prices have fallen by more than 11%, forcing the clothing store to close due to the global epidemic to combat consumer demand, continuing the downward trend in demand caused by the Sino US trade war.

The International Cotton Advisory Committee (ICAC) said in a report that in addition to the weak demand from brands and retailers, the high level of storage in the current and next year and the fall in polyester fiber prices will also drag on cotton prices.

Arun Sekhsaria, general manager of D.D. Cotton, an exporter, said India's acquisition made cotton more profitable than corn and soybeans.

According to data from the India Cotton Association (CAI), India's current cotton price is the lowest in the world. ICAC expects cotton exports from India to increase from 530 thousand tons in 2019/20 to 890 thousand tons in.

But analysts say that lower prices are not enough to offset the impact of widespread closures and factory closures on demand.

Rabobank Charles Clack, an Australian and New Zealand analyst, said: "for Southeast Asia's main spinning mills, we have seen a decline in demand for cotton imports."

Last week, the US Department of agriculture lowered its estimate of global cotton consumption in 2019/20 to 102 million 650 thousand bales from 105 million in May.

The Ministry of agriculture also raised 2020/21's final inventory estimate by 5 million 200 thousand packs to 104 million 670 thousand bales. Analysts said that the end of inventory levels too much or further suppress cotton prices.

"My mission will not rebound in the short term to the level before the outbreak of the new crown," said Peter Ejli, head of risk management at Plexus Cotton, UK trader. 　　