Does India cotton production to fall by 1% due to Lackluster rainfall affect the price of the cotton material
India cotton production in 2021-22 is
expected to fall 1% yoy to 28.34 million bales (up 2% previously) due to
insufficient rainfall during the main planting period in July and August.
As of mid-September, rainfall in Gujarat
was nearly 30 percent below the long-term average, reducing the area available
for planting and affecting yields. Gujarat is the most productive state in
India (accounting for about a third of the country annual output).
India cotton production in 2021-22 is
expected to fall 1% yoy to 28.34 million bales (up 2% previously) due to
insufficient rainfall during the main planting period in July and August, Fitch
Solutions said on Tuesday.
In addition, Fitch said recent outbreaks of
pink bollworm in Bhatinda and Mansa could also weigh on yields. However, if the
weather returns to normal and pink bollworm outbreaks are adequately
controlled, production should rebound in 2022-23.
"With the spread of COVID-19, domestic
production and consumption of textile raw materials are slowing down."
However, the output of the domestic textile
manufacturing industry is likely to increase in the coming years as the
government recently announced a five-year Production-linked Incentive (PLI)
program to provide additional financial support to domestic textile manufacturers.
At the global level, Fitch raised its 2021
average cotton price forecast to $90.0 / lb (previously $87.0 / lb). The report
said the short-term supply outlook had deteriorated,
At the same time, Fitch said global demand
would grow strongly in 2021, and subsequently raised its demand forecasts for
Bangladesh and Turkey. The recovery in both countries has been better than
initially expected.
In the long term, Bangladesh and Vietnam
will gain significant market share in cotton consumption as their textile
industries expand significantly, According to Goodwill.
"India, Indonesia and Pakistan are
likely to benefit from the shift of low-value manufacturing from China, which
will increase their share of global apparel exports."
However, the lack of preferential trade
access to US and EU markets and rising Labour costs will slow expansion. Fitch
said demand in China would continue its downward trend as the Chinese
government looks to reduce its garment manufacturing business and move up the
value chain.
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The market size of the cotton material
in the global cotton fabrics industry
With the continuous development of the
production technology and process of the cotton material in the industrial
cotton fabrics industry, the application scope of the cotton material is becoming
more and more extensive and the market potential is huge. Its development level
has become one of the important indicators to measure the comprehensive
competitiveness of a country cotton fabrics industry.
Industrial cotton fabrics are defined as
"products used in many non-cotton fabrics industries"
internationally. Compared with the traditional cotton fabrics industry with
labor-intensive and low technology content, the cotton material industry has
the characteristics and advantages of capital intensive, high technology
content and huge market demand space.
In terms of the global market, the global
industrial cotton fabrics market including cotton material will reach usd
258.33 billion in 2020 and is expected to reach USD 321.65 billion in 2028. In
the next few years, the global industrial cotton fabrics industry will still
maintain a growing trend.
The market price of the cotton material
in the global cotton fabrics industry
Developed countries and regions such as the
United States and the European Union occupy the leading position in cotton
material global industrial cotton fabrics market while emerging markets such as
China and India show a high growth momentum.
Since the 1990s, due to the consideration
of labor, raw materials and other cost factors, manufacturers in Europe and the
United States and other developed countries have shifted their focus to product
research and development, brand building, channel expansion and other aspects
in China, so that the production and manufacturing capacity of cotton material
has gradually shifted to East Asian countries, especially the middle and
low-end products.
The global industrial cotton fabrics cotton
material production bases are mainly concentrated in the United States, Japan,
South Korea and Taiwan, and the European industrial cotton fabrics industry is
shifting to Asia and the United States. The Asia-Pacific region accounted for
the highest proportion of 40%; North America is next at 25 percent, followed by
the Middle East & Africa, Europe and South America.
The market trend of the cotton material
in the global cotton fabrics industry
Data in 2020 show that China cotton fabrics
industry accounts for more than 50% of the world total, chemical fiber output
accounts for 70% of the world, and trade accounts for one-third of the world.
China has the most complete industrial chain, and most of its cotton material
process manufacturing and equipment level has reached the international
advanced level. China is also the world largest cotton fabrics and apparel market.
In 2020, the total retail sales of cotton fabrics and apparel in China exceeded
1,236.7 billion yuan.
COVID-19 has had a huge impact on the
overall development of trade and the cotton fabrics industry. Enterprises in
various segments have realized that they are heavily dependent on Chinese
suppliers. When China was unable to supply cotton material in the early stage
of the epidemic, for example, the automobile and cotton fabrics industries
could not produce normally. About 90 percent of materials imported by the EU,
US and Japan come from China, underscoring the country importance in many
products and raw material supply chains.
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