A Tight Global Cotton Supply May Push Up The Price Of Textiles

This year's monsoon season is going smoothly, improving India's cotton production and increasing domestic supply. Cotton is an important input in the weaving industry. India expects to produce 35 million 800 thousand bales of cotton in 2013-14 years, an increase of 5.7% over the 2013-14 years.

However, domestic cotton consumption may only increase by 3.6% to 29 million 800 thousand packages. The excess cotton available for export is 6 million bales. India weighs 170 kilograms of cotton per packet. However, the weight of the cotton in the global market is about 218 kilograms.

Global prices have been rising. In the US Intercontinental Exchange, cotton prices rose 24.4% to 93.4 cents / pound (about 46343 rupees /candy) in August 16th. Even if the price falls to 84.5 cents / pound (about 41927 rupees / candy), it also indicates that global prices will start to strengthen in the medium term.

This is because, contrary to the situation in India, the main producers, such as China, are having bad weather and the world's cotton production is expected to decline. The US Department of Agriculture estimates that 2013-14 of the world's natural fiber production is 116 million 380 thousand packs, down 3.9% from last year.

On the other hand, global cotton demand growth. The US Department of agriculture predicts that in the 2013-13 years (from August 1st), global cotton consumption increased by 2.2% to 109 million 800 thousand bales.

This may lead to a tight global cotton supply situation. If the government allows, this will provide a good opportunity for India cotton farmers to make money. Cotton prices have dropped significantly from 2.15 cents / pound (106678 rupees / candy) in April 2011.

However, the sluggish demand in China may restrict cotton futures.

Cotton is the most important. Spin Fiber accounts for about 35% of all textile fibers used worldwide.