16 November 2022, Mumbai:
The global cotton demand outlook continues to be benign in this recessionary environment and delving into how new cotton harvests are arriving in India and the High Plains of Texas does not augur well for the Cotton and Textile Sectors.
As things stand today
Recently Cotton Association of India (CAI) a prime mover, released its 2022-23 cotton supply and Indian demand prognosis and estimates on the back of global demand headwinds and the available trade data points," Cotton production in India during 2022-23 (October 2022 to September 2023) is estimated to be 34.4 million bales (170 Kgs/bale), while the total supply will be 38.78 million bales (170 Kgs/bale). The consumption is estimated to be about 30 million bales, which is lower than the previous year’s consumption".
Again trade estimates for the current year in the period of Oct. 2002-Sep. 2023, reflecting skeptical demand view especially with looming global recessionary concerns even if it is soft-landing in the US and the EU where hopefully it will not be a longer recession/slowdown in the economy yet Indian domestic consumption by spinners are expected to be lesser by 1.8 million bales vis-à-vis last cotton year, mirroring/echoing muted demand or not so optimistic scenario.
Trade bytes
Velmurugan Shanmugam, General Manager of Jayalakshmi Textiles, India avers," The cotton stock situation is stable and we continue to be sanguine on the sector alludes. Albeit, as like to-like comparison Yarn demand is not as great as what we witnessed during the corresponding previous year, given that daily cotton yarn production from June to October 2022 was just about 60% of its usual production levels speaking column of the prevailing weak demand.
Again the tenor of Gnanasekar Thiagarajan, Director of Mumbai-based commodity research firm, Commtrendz Research statement was,“ Currently product demand is pretty weak and, the US-China cotton ban has only compounded the problems of India's cotton yarn spinning industry on the back of Chinese tactical cheap offering leading to unintended & far-reaching consequences in the past couple of months".
Road ahead
There is a compelling need for cotton demand creation to explore new markets, innovation-led value-added production, cost efficiency, and deploying sustainable production best practices on the back of improved efficiency and productivity is the way forward.
Upside; Make no mistake given that cotton is a natural fiber always has a well-accepted story to tell regarding product sustainability in times when global climate concerns are rising.
Disclaimer: Though the evidence is very inconclusive as expectedly we are near the end of the interest rate hike given the moderation in the inflation lately, is only giving hope that demand for items like textiles will improve.
To play devil's advocate it does not come as a surprise to anyone that of late, the Government of India is beginning to come out with encouraging/supportive policies favouring MMF/synthetic sector to build capabilities and capabilities in response to its rising global sustainable demand tailwind.
(CREDITS: Dr. Seshadri Ramkumar, Ph.D., CText, FTI (UK), FTA [Honorary] (India), TAPPI Fellow (USA), Professor, Nonwovens & Advanced Materials Laboratory, Texas Tech University, Lubbock, TX, USA)
