The harvested area is estimated at 13.0 m hectares, up nearly 7 % from last year. The area increase is due to the timely arrival of the 2022 southwest monsoon and the high market prices for cotton at planting. Yields are expected to reach 444 kg per hectare, down 4 % from last month, but up 2 % from last year.

Slow Market Arrivals

Market arrivals have been slow since the marketing year began on October 1. Cotton arrivals, as reported by the Cotton Corporation of India, are reported in Lakh bales, and were down 39 % from the same period a year ago according to their December report. Cotton arrivals are now the slowest in the last five years. Because of these slow arrivals, some analysts in the cotton trade are beginning to speculate on the amount of cotton in the market due to excessive rainfall during planting and the growing season. Others are speculating that farmers could be withholding cotton from the market in anticipation of higher prices. Widespread planting of unapproved hybrids in Central India is likely to improve yields due to its shorter maturity duration which will allow for fewer heavy infestations of pink bollworm.

Mills Operating at 60 %

Capacity FAS Mumbai estimates season 2022/23 cotton consumption at 5,18 m tonnes, 1 % lower than USDA official estimate, and lower compared to 5,44 m tonnes in 2021/22. Trade sources indicate that mills are currently operating at 60 % capacity. The sharp decline in exports has led to limited operational capacity for textile mills, and competition for limited orders has intensified. The order flow from international retailers in Europe and the United States remains muted as excess inventory is impacting near-term demand.

FAS Mumbai estimates 2022/23 cotton exports at 827,000 tonnes, 76,000 tonnes higher than the USDA official estimate. Post estimates 2022/2023 imports at 327,000 tonnes, 11,000 tonnes lower than the USDA official estimate. Post expects that mills will continue to procure imported cotton until domestic fiber prices correct to affordable rates.