India: Tight Stock Of Textile Mills, Large Demand For New Flowers Before Listing

On July 21, cotton India sold about 700000 bales of cotton, the highest one-day sale in five years, due to discounts on large orders.

According to statistics, in 2019 / 20, Indian cotton companies purchased 10.4 million bales of cotton (170 kg / bag), accounting for one third of India's cotton production. So far, CCI has sold only 7.4% of its inventory because it does not want to auction. From October 2019 to June 2020, CCI sold only 200000 bales of cotton because CCI refused to sell at a loss, as traders and mills expected.

As India's cotton harvest is expected to start again in 2020 / 21, CCI is about to start large-scale procurement again, offering a discount of 1500 rupees per package for orders to purchase more than 200000 bales of cotton. Last Tuesday (July 21), CCI sold 700000 bales of cotton to bulk buyers, the highest single day sale since 2014, up from 1.1 million bales.

According to the minimum support price (MSP), the cost of cotton purchased by CCI is about 45000 rupees per package, while the market price is about 35000 rupees per package. In addition to large purchases in 2019 / 20, the company's agent, the Maharashtra cotton growers Marketing Association, purchased 1.7 million bales of cotton from farmers alone.

CCI also has 900000 bales carried forward in 2018 / 19, which is about 1000 rupees lower than new cotton. Cojp cojp bought 300000 bales of cotton from CCI's partner on Tuesday. "We don't think cotton prices will go down too much from the current level," he said. As the stocks of traders and textile mills have dried up, it is expected that domestic textile mills and exporters may have some demand. Before the cotton listing in the new year, CCI may sell about 300000-350000 bales of cotton.

Ashwin chandran, President of the southern Indian Textile Mills Association (SIMA), said India's spinning mills are currently operating at 30% to 70% capacity. By November, the plant may need 4.5-5.5 million bales of cotton. Excluding current stocks, textile mills may need to buy about 1.5-2 million bales of cotton until next year's harvest begins.