Fitch predicts fall in cotton produce due to less rain
Fitch Solutions said that it expects cotton production in India to fall by 1% year-on-year to 28.3 million 480lb bales in 2021-22 due to lacklustre rainfall throughout July and August, the main planting times.
India
The cotton
production in India to fall by 1% year-on-year to 28.3 million 480lb bales in
2021-22 due to lacklustre rainfall throughout July and August, the main
planting times, said Fitch Solutions.
Rainfall in Gujarat
— the country’s top producing state (accounting for around a third of the
country’s annual production — is almost 30% below its long-term average as of
mid-September which has reduced the area available for planting and weighed on
yields.
In addition, said
Fitch, the recent outbreak of pink bollworm in Bhatinda and Mansa will probably
also act as a drag on yields. Nevertheless, production should bounce back in
2022-23, providing that weather normalises and that the outbreak of pink
bollworm is adequately contained.
However, domestic
textile manufacturing production is likely to increase over the next few years
as the government’s recently announced a five-year Production-Linked Incentive
(PLI) scheme to provide additional financial support to domestic textile
manufacturers.
India, Indonesia and
Pakistan are likely to benefit from the shift in low-value manufacturing away
from China which would boost their share in global apparel exports.
However, a lack of
preferential trade access to the US and EU markets as well as higher labour
costs will temper the pace of expansion. China’s demand will continue to trend
lower as authorities look to reduce apparel manufacturing operations and move
up the value chain, said Fitch.
Source: Business Standard
Image
Source: Google Images
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