According to Indian industry insiders, the high price of Indian cotton has reduced the profitability of the textile industry. Although Indian cotton is not export competitive, the government believes that the price is reasonable. In the past two years, the government has increased MSP prices by 38%, but cotton farmers are still willing to sell cotton to private cotton merchants. Last year, cotton farmers sold to the government only accounted for 3% of total production.
Judging from this year’s perspective, India’s cotton yield is undoubtedly high, and all parties are optimistic about the output. Cotton production this year is expected to increase by 20%, the highest in the past five years. However, although India has a bumper cotton harvest this year, the government still hopes to raise cotton prices. It is expected that Indian cotton prices will remain strong this year. Since domestic cotton contains a lot of impurities and no long-staple cotton, cotton imports will remain at a high level.
According to other news, yarn prices in India have been stable in the past week. In the past year, yarn prices have dropped by double digits, and 100% pure polyester yarn has dropped by more than 20%. In the past four weeks, domestic cotton yarn prices in India have fallen by 2.3%, and polyester and viscose yarn prices have fallen by 3.3%. Most quotations have experienced a year-on-year decrease of more than 2 digits. 30-count combed yarn fell by 12.6%, and 40-count combed yarn fell by 13.7%. During the same period, Indian cotton yarn export quotations remained stable.
