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Fitch predicts fall in cotton produce due to less rain

Sep 20, 2021
Fitch predicts fall in cotton produce due to less rain


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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