India's raw cotton imports are expected to soar by 80% this year.

Release time:

2019-05-08

Due to the shortage of high-quality cotton supply to textile mills, India's cotton imports are expected to soar by 80% this crop year (October 2018 to September 2019).

According to data compiled by the Cotton Association of India (CAI), a top industry association, India's raw cotton imports are expected to be 2.7 million bales (1 bales = 170kg) this year, compared with 1.5 million bales last year.

Another industry body, the Confederation of Indian Textile Industry (CITI), forecasts total imports to reach 2.4 million bales.

India is the world's top cotton producer, but CAI in April lowered its estimate of Indian cotton production to 32.1 million bales from 32.8 million bales.

Nevertheless, Indian textile mills will import raw cotton this year instead of special cotton as in previous years. India mainly imports cotton from the Americas and Africa.

Atul Ganatra, president of CAI, said: "The main reason is that farmers and wholesalers do not have stocks. Drought in the main growing areas of Maharashtra, Telangana, Gujarat and Andhra Pradesh has led to reduced crop production this year. In addition, the quality of late harvest cotton has also deteriorated due to lack of soil moisture in farmland. These poor quality cotton cannot be used for textiles."

In fact, there are reports that due to water shortages, farmers have uprooted 70-80% of the planting area before the crucial third and fourth rounds of picking.

Cotton quality began to deteriorate as soon as the second round of picking began in early February.

Generally speaking, the total cotton consumption in India is 32 million bales.

Carryover stocks can fill the gap, with the Confederation of Indian Textile Industry (CITI) predicting that carryover stocks and imports will be in 3.6 million bales in the previous year.

Sanjay Jain, Chairman of CITI, said: "Despite this year's poor harvest, the supply situation is very good as there are 4 million bales of year-end inventory left for the next year. Thanks to the large opening inventory, reduced exports and increased imports, the production gap has been closed. The state-owned Indian Cotton Corporation has also begun to sell inventory, which will further enhance market liquidity."

Stocks of cotton by Indian cotton companies, multinationals, ginners and Multi Commodity Exchange are expected to be at 4.7 million bales by the end of March, trade sources said.

India's 2018-19 cotton exports are expected to decline to 4.7 million bales, compared with 6.9 million bales last year.

Rising cotton prices in India have weakened export competitiveness.

Sources said that CAI recently convened a meeting of cotton traders and textile mills to design inventory sales strategies. It is stated that the inventory of textile mills as of the end of March was in 4.6 million bales.

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