Industrial Cluster: India'S Cotton Production Increases, Exports Decrease

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India has an important position in the global cotton market in terms of export, consumption and inventory of cotton, with each proportion ranking in the top three. USDA The latest data in October shows that India's cotton output in 2022/2023 will increase by 130000 tons to 5.443 million tons, annual consumption will decrease by 218000 tons to 5.225 million tons, imports will increase by 6.5 tons to 283000 tons, exports will decrease by 380000 tons to 435000 tons, and the ending inventory will increase by 746000 tons to 2.618 million tons, and the inventory consumption ratio will increase by 15.7% to 50.11%. In October, India's ending inventory was increased by 6000 tons, and the inventory consumption ratio was increased by 0.11%. Other data remained unchanged in September.

The Cotton Association of India (CAI) released the final estimate of cotton output in 2002/2023. It is estimated that its annual output is 31.8 million bales, higher than 29.9 million bales last year, slightly higher than the 31.1 million bales estimated in July. The initial estimate is 34.4 million bales, higher than the government's third estimate of 34.3 million bales. According to the data of the Ministry of Agriculture, the planting area will be 12.4 million hectares in 2023/2024, lower than 12.8 million hectares in the same period last year.

The Indian government has significantly increased the MSP price of cotton in 2023/2024. The MSP price of medium fiber length cotton has increased by 8.9% to 6620 rupees/hundredweight, and the MSP price of long fiber cotton has increased by 10% to 7020 rupees/hundredweight. The cost of cotton converted into lint is above 77 cents.

As of September 22, India has planted 12.3423 million hectares of new cotton in 2023/2024, - 3.25% year-on-year. The agricultural department of India reduced the planting area of Andhra Pradesh, the southern cotton region, by 32% to 383000 hectares, while the planting area of Trengana, the southern state, was 1822400 hectares, 9.9% lower than that of the previous year.

In terms of demand, since the beginning of this year, clothing orders from external European and American markets have begun to show a weak trend, but India's domestic cotton prices have risen sharply, and the textile operating rate has continued to decline, limiting domestic demand and unable to ease the weak external demand orders.

In the fourth quarter, India's output increased slightly, while brokers in the European and American markets were still weak and fermenting. In the downward cycle, India's domestic demand was poor and the cost was high. External orders still had the risk of shrinking, and India's cotton supply and demand pressure continued to increase.