India is on the verge of a potential "cotton crisis"—and no one is paying attention.
India is on the verge of a potential "cotton crisis"—and no one is paying attention.Washington D.C. for cotton producing countries That's the warning from Terry Townsend, former executive director of the International Cotton Advisory Committee, a US-based trade body. While the South Asian nation's current 2022/23 crop estimates by the leading statistical organization show a year-equivalent production of more than 5 million metric tons, the amount of seed cotton delivered by farmers to buying centers by the end of the February season is on pace with the previous season. 1.1 million metric tonnes behind. For a longtime industry vet, this is a huge red flag."There's a fairly constant ratio between seed cotton and lint," he said of the cotton fiber that goes into everything from T-shirts to jeans to bath towels. "So based on what we call 'arrival', you can estimate the crop fairly accurately. It is possible that there is a slight difference and some of that gets captured. But it is going to close the gap of 1.1 million metric tonnes. Not there."It is not just India, which together with China contributes half of the world's cotton supply. From Argentina's point of view, the entire global cotton system is broken. Even more so now that the pandemic and the war in Ukraine have thrown markets into disarray."We don't have the agricultural science, we don't have trained farmers, we don't have the chain-of-custody system, we don't have the things that actually result in high yields, let alone the stability of prices that would encourage those producers." to do," he said. "There's just been neglect and mismanagement."While India was one of the world's largest exporters of cotton in 2011/12, exports are running at a decade low, competing directly with Australia, Brazil and the United States. Townsend thinks the country will be a small net importer of cotton this year. He said imports would almost certainly be "significantly" larger than exports in 2023/24.“It is a matter of embarrassment for the government. It is a matter of embarrassment for the Cotton Association of India and other organisations. “And people are still claiming that somehow farmers have harvested cotton but they are not making it to the buying centers because they are waiting for higher prices and magically, in the months after the season , the cotton farmers are going to bring it. Seed Cotton.Neither the Indian Cotton Association nor the textiles ministry responded to requests for comment.Still, not everyone agrees with Townsend's forecast.Keshav Kranti, Chief Scientist, International Cotton Advisory Committee, said, “Cotton arrivals have declined, but there is no perceived shortage of cotton, which could be a cause of concern for spinners.” The gap in February, he said, has already narrowed slightly in March, a trend expected to continue. And if farmers are indeed holding cotton in the hope of better prices, "it is unlikely that this situation will continue," he said.The textile ministry's committee on cotton production and consumption estimates mill consumption of cotton this year at 5 million metric tons, or 3.7 percent less than last year and two years ago, due to weak demand for yarn in India and global economic concerns. 7.8 percent less in Kranti said. He said the same agency expects cotton production of 5.6-5.7 million metric tonnes, "sufficient for domestic consumption reducing the need for imports". "It is likely that the situation will return to near-normal levels in the coming months."But if cotton production this year is poised to be "well south" of 5 million metric tons, there isn't much time left to rally, Townsend said. Cotton prices are going to be even higher soon. And if commodities and mills are going to shut down because there's nothing to work for, hundreds of thousands of people could lose their jobs. As far as the wider industry is concerned, a reckoning is looming on the horizon.“Anyone expecting to bring a shipment of cotton from India this calendar year for shirts or pants or whatever it may be has probably already spun yarn into cloth and is now involved in the operations of dyeing, finishing, cutting and sewing. doing its work through and being done. Put on the ships, so that we can recover. through this season," Townsend said. "But certainly the whole cotton supply chain in India is going to be seriously affected by what's going on."👇🏻👇🏻👇🏻👇🏻https://smartinfoindia.com/en/news-details-english/dollar-news-rupee-smartinfo-sensex-todaymarket-niftynews
