February 2003 Edition:
What Happened To India's Import Market?
This month, India's cotton import forecast for MY 2002/03 was lowered 300,000 bales to 1.5 million bales. That is below total MY 2001/02 imports. India's cotton imports and export-oriented textile industries have shown strong growth in recent years, and this summer's weather troubles caused doubts about India's production and raised expectations for imports. In August, it looked as though India would be the world's largest cotton importer in MY 2002/03. Crop conditions improved during the fall, and due to price concerns and some negative quality experiences with imports last year, Indian mills turned first to domestic production and some are reportedly covered through the end of the marketing year.
India's lagging imports are one of the biggest surprises of the marketing year thus far, and U.S. exporters are particularly affected. In marketing year 2001/02, U.S. cotton exports to India more than tripled to over one million bales, and the U.S. share of total Indian imports rose from 20 percent to 60 percent. India became the third largest foreign destination for U.S. cotton, after Mexico and Turkey, representing 9 percent of total U.S. cotton exports. As of the end of January 2003, U.S. cotton export commitments to India were only about 150,000 bales, compared with nearly 900,000 bales this time last year. But India's import demand will need to rise significantly in the second half of the season as domestic supplies tighten. With reduced exportable supplies in Australia and West Africa, the U.S. is positioned to capture a substantial share of India's forecast import demand.
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TABLE OF CONTENTS
World Cotton Outlook
U.S. Cotton Highlights
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