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INDIA, CHINA, MEXICO, INDONESIA AND TURKEY: COTTON PRODUCTS UPDATE

India: Cotton and Products Update;

Post estimates cotton production at 29.3 million 480-lb. bales in marketing year (MY) 2020/21 on an area of 13 million hectares. There are increasing reports of pest infestation across various states, but most are localized incidences. Fiber prices have improved due to a sharp rise in government procurement, coupled with rising exports of raw cotton and cotton products. Mill consumption remains constrained at 22.8 million 480-lb. bales as fears of additional lockdown measures continue to affect consumer sentiment.

China: Cotton and Products Update

In marketing year (MY) 20/21 (August-July), China’s cotton consumption and cotton imports are projected to recover to 8.1 million metric tons (MMT) and 2 MMT respectively, following the COVID19 related decline in cotton use and imports in MY19/20. This decline was the result of market disruptions and reduced consumer demand for textiles and apparel. Forecast U.S. cotton exports to China are expected to increase in MY20/21 mainly driven by China’s recovering spinning demand and implementation of the U.S.-China Phase One Trade Agreement. Based on forecast higher yield offsetting acreage decline, China’s MY20/21 cotton production is 5.9 MMT, unchanged from MY19/20.

Mexico: Cotton and Products Update

Mexico cotton production for marketing year (MY) 2020/21 is forecast 36 percent lower than the previous MY, based on limited access to inputs for production and reduced government support. Additionally, low global textile and apparel demand due to economic effects of the COVID-19 pandemic and corresponding low prices, resulted in some producers planting other crops. Drought conditions in northern Mexico have been reported since the end of May, and has delayed harvest through December. While no effects to final production are expected, there are concerns about fiber quality. The textile industry is slowly recovering after the partial reopening -with a multitude of sanitary measures- of spinning mills and textile factories in July, and cotton imports from the United States are expected to increase gradually over the coming months, although full recovery is not expected until at least early 2022.

Indonesia: Cotton and Products Update

Indonesia cotton consumption for 2019/20 has declined to a 10-year low of 2.4 million bales due to weaker domestic and overseas demand related to COVID-19. The U.S. has maintained its position as Indonesia’s largest supplier of cotton, accounting for 36 percent of imports.

Turkey: Cotton and Products Update

Turkey’s cotton production is now estimated at 625,000 MT (2.87 million bales) on 350,000 hectares in marketing year (MY) 2020/21. The yield in the South Eastern (GAP) region has been a bit better than expected due to favorable weather conditions. Low yields in the last few MYs, unattractive cotton prices, inflated costs, uncertainty created by COVID-19, and better returns from alternative crops, in addition to low subsidies from the government and the third-year rotation rule are the major reasons for the decrease in planting areas. Cotton consumption in Turkey has been estimated at 1.45 million MT (6.66 million bales) for MY 2019/20 and imports for the same period reached one million MT (4.67 million bales), a record high amount in recent years.

Source: USDA, Foreign Agricultural Service (FAS) Gain Reports

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