According to industry insiders in India, the number of Indian cotton listings hit a three-year high in March, mainly due to the stable price of cotton at 60000 to 62000 rupees per kand, and the good quality of new cotton. On March 1-18, India’s cotton market reached 243000 bales.
Currently, cotton farmers who previously held cotton for growth are already willing to sell new cotton. According to data, India’s cotton market volume reached 77500 tons last week, up from 49600 tons a year earlier. However, although the number of listings has only increased in the last half month, the cumulative number so far this year has still decreased by 30% year-on-year.
With the increase in the market volume of new cotton, questions have arisen about the cotton production in India this year. The Indian Cotton Association just last week reduced cotton production to 31.3 million bales, almost in line with 30.705 million bales last year. Currently, the price of India’s S-6 is 61750 rupees per kand, and the price of seed cotton is 7900 rupees per metric ton, which is higher than the Minimum Support Price (MSP) of 6080 rupees per metric ton. Analysts expect that the spot price of lint to be lower than 59000 rupees/kand before the market volume of new cotton will decrease.
Indian industry insiders say that in recent weeks, Indian cotton prices have stabilized, and it is expected that this situation will remain at least until April 10. Currently, demand for cotton in India is relatively flat due to global macroeconomic uncertainty, industry concerns over the late stage, yarn mill inventories beginning to accumulate, and low downstream demand is detrimental to cotton sales. Due to the poor global demand for textiles and clothing, factories lack confidence in long-term replenishment.
However, the demand for high count yarn is still good, and manufacturers have a good start-up rate. In the next few weeks, with the increase in new cotton market volume and factory yarn inventory, yarn prices have a trend of weakening. As for exports, most overseas buyers are hesitant at present, and the recovery in China’s demand has not yet been fully reflected. It is expected that the low price of cotton this year will maintain for a long time.
In addition, India’s cotton export demand is very sluggish, and Bangladesh’s procurement has decreased. The export situation in the later period is also not optimistic. India’s CAI estimates that India’s cotton export volume this year will be 3 million bales, compared to 4.3 million bales last year.
Post time: Mar-28-2023