Global cotton markets: Production vis-à-vis price

Posted November 24, 2021

 

By Seshadri Ramkumar

 

LUBBOCK, Texas – Demand, speculation and consumer awareness on natural fibers are all driving cotton prices, while the new crop situation is healthy.

 

Recently, India’s largest textile mills federation, The Confederation of Indian Textile Industry (CITI), has made the clarion call to bring stability to cotton and yarn prices by avoiding panic buying and having minimal stock. Mr. T. Rajkumar, chairman of CITI, in communication to members brought attention to the fact that there has been record crop in India and the new season has started with an opening stock of 7.5 million bales (170 kgs/bale).

 

According to the U.S. Department of Agriculture, global production and consumption in 2021/22 will be higher with ending stocks lower than the previous year. This is indeed positive news for the cotton textile sector in terms of demand for cotton products.  

 

The global textile industry is hoping that with healthy cotton crops in India and the U.S. this year, the market will cool down by the beginning of December. Textile industry leaders are advising against stockpiling, as expressed by Mr. Velmurugan Shanmugam, general manager of 70,000 spindles cotton yarn mill in Arruppukkottai, India, a few days ago.

 

U.S. production this marketing year (2021/22) is expected to be 18.2 million bales (480 lbs. each) and the export is projected to be 15.50 million bales. Cotton exports from the United States is strong with good demand from Pakistan, Vietnam and Turkey. China is still the No. 1 importer of U.S. cotton.  

 

The High Plains of Texas is having good crop this year, with 3.5 million bales (480 lbs. per bale) expected in the area, serviced by the Lubbock Classing Office. That is substantially higher than last year’s production.

 

“It is a big crop, and the quality is good,” said Danny Martinez, area director, USDA Cotton Classing Office, Lubbock.

 

With the data available from Lubbock Classing Office, based on 700,000 bales classed so far this season, the average strength has been around 30.53 g/tex, staple length of about 36.18 mm, with 48% of micronaire in the premium range.

 

In India, while production is slightly higher than domestic consumption, supply is expected to be tight, with exports pegged at 5.80 million bales. According to the USDA, India’s domestic consumption will be about 25.8 million bales (480 lbs. each), showing strong demand.

 

Arrivals have been picking up in India and spinning mills’ associations are encouraging cautious handling of the situation so that an unwarranted hike in prices can be softened. As is slowly happening and expected by end-users, prices will soften by December, which is eagerly awaited by manufactures and consumers.

 

Recent happenings in the cotton textile supply chain have shown that the demand for cotton products is real and growing – an encouraging trend for farmers and the manufacturing sector.

 

Having just come out of the United Nations’ COP 26 Summit, the need for sustainable products will be growing, which is a positive sign towards sustainable world and hence the consumption of natural products.

 

Dr. Seshadri Ramkumar, Ph.D., CText., FTI (U.K.), FTA (honorary), is a professor at the Nonwovens & Advanced Materials Laboratory at Texas Tech.

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Seshadri Ramkumar

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