The latest forecast from the Cotton Council of India shows that India's cotton production in 2020/21 is 35.85 million bales (about 6.0945 million tons), with total annual supply of 49.75 million bales, of which domestic consumption is 33 million bales (up 8 million bales year-on-year) and exports 5.4 million bales (about 918 million tons). The USDA's latest monthly report shows that India's cotton production and exports in 2020/21 are 6.423 million tons and 1.089 million tons respectively, both significantly higher than CAI's forecast figures. Some private cotton processors and traders in Gujarat, Mabang and other states believe that CAT's figures are more accurate and that it is unlikely that India's total cotton exports will exceed 1 million tonnes in 2020/21.

What are the constraints on India's cotton exports in 2020/21? Indian cotton enterprises and international cotton merchants are summarized as follows:

First, supported by the purchase price of MSP, CCI raised the cotton price of 2020/21 significantly while controlling the cotton rotation. The price difference between the Indian cotton price and the Brazilian and American cotton for the shipment period from February to April narrowed to 3.5-4.5 cents per pound, and the export competitiveness continued to weaken.

Second, India imposed a 10% tariff on cotton imports to stimulate the rise of cotton prices in India. Although it is conducive to domestic consumption, it is not conducive to the FOB and CNF export price of cotton.

Third, Indian rupee appreciation pressure is prominent in 2021, not conducive to cotton, cotton yarn and other exports. The US House of Representatives has reportedly rammed through the $1.9 trillion stimulus package after 15 hours of negotiations, which will now go to the Senate for a vote. In response, the Indian minister said there was "huge upward pressure on the rupee";

Outbreak of four is India's domestic growth momentum, prevention and control work, spinning clothing enterprises since the last three or four quarters has comprehensive resume work and production, coupled with a lot of Europe and the United States, the Middle East order retaliatory growth, India cotton rebound sharply, consumer demand not only cotton yarn, grey cloth, such as prices have also jumped, quickly improve mills profit, of cotton, digestion ability enhancement, this momentum will continue a year;

Fifth, according to the survey, in the past two years, cotton mills in Vietnam, Pakistan, Bangladesh and other countries have gradually increased their procurement of Brazilian and African cotton, while the indicators of Indian cotton, such as rolling, impurity and packaging, are still poor. Therefore, in addition to American cotton, the substitution of cotton from other countries to Indian cotton is also increasing.

According to the feedback from cotton textile enterprises in Henan, Shandong and other places, S-6 cotton planting area, total output and lint quality decreased significantly in Gujarat due to the influence of weather, cotton species, epidemic and other factors in 2019/20, resulting in a substantial reduction in the supply of high-spinnability S-6, which does not match the actual demand of large and medium-sized textile enterprises in China. Therefore, domestic enterprises turn to contract procurement of cotton from Brazil, the United States and West Africa.