By Dr. Seshadri Ramkumar | May 14, 2019
A prolonged U.S./China trade war and India’s lowered cotton output could open new market opportunities for United States cotton in India.
Arun Sekhsaria, director of the Cotton Association of India (CAI), provided an optimistic picture of the potential growth opportunities in cotton trade between the U.S. and India. Sekhsaria was present at the late April meeting between the USDA representative in India and CAI officials that led to the downward revision of India’s production estimate by USDA. USDA’s official estimate is now at 32.5 million bales (325 lakh bales of 170 Kgs each), with CAI’s estimate slightly lower at 31.6 million bales (316 lakh bales of 170 Kgs each).
Lack of rain during the early part of the season has led to the decline in cotton output in major cotton growing areas such as Gujarat, Telangana and Maharashtra. Recent discussion among the Indian end-user community is that spinners will have to look to imported cotton, and Sekhsaria and other traders are working to provide appropriate supplies for the spinners.
Commenting on the trade war between China and USA, Sekhsaria opined that Brazil may capture the China cotton market, and that the United States should be looking for different markets such as India. Opportunities exist for cottons grown organically and under the Better Cotton Initiative (BCI).
“India is an appropriate market for 2018 and 2019 U.S. crops,” stated Sekhsaria. However, he noted, the quality of cotton left from the 2018 crop may not be adequate. But with the rains and favorable weather in West Texas, a good quality crop is expected for the 2019, he added.
Beginning in August, India will be a favorable market for U.S cotton, as its prices are below the MSP support prices in India. To help increase awareness of the U.S. cotton industry among Indian spinners, Sekhsaria is planning to bring a delegation of spinners from India to Texas in August.