There Will Be Competition For Cotton Supply Between India And China.

India is the second largest in the world.

Despite the expansion of the planting area, the cotton yield per unit area in India dropped to about 475 kg / ha, or 38% lower than the global average yield per unit area. Because cotton is generally picked by hand, unlike other major cotton producing countries, such as the United States and Australia, they are all cotton picking machines.

The planting area is limited, not only because of limited land and weather fluctuations.

Sunil Khandelwal, chief financial officer of Alok industry, said: "in the next 3-4 years, the situation of India's cotton surplus will disappear. The mills will either import high priced cotton or choose artificial fibers."

According to Khandelwal, India is the largest textile producer in terms of turnover.

By the year September 2012, India's cotton production will reach a new high of about 6 million tons, or 35 million packages, with a weight of 170 kilograms per package, and then the output will begin to decline.

Global prices may prevent India farmers from raising their sown area, and the supply of cotton from Australia, Brazil and African countries has increased.

This will prompt India to compete with its huge Asian neighbor, China, which is highly dependent on importing cotton from the United States. The United States is the world's largest cotton producer.

The two Asian countries account for 60% of world cotton output.

Last year, cotton was the best performing commodity. This best performance remained in the first quarter of 2011, attracting a lot of speculative interest, reaching its peak in the three quarter of last year, although competition for supply of goods began to cool down.

Future competition with China

According to the data released by the India government, China is the largest textile exporter in the world, with a global market share of 28.3% last year, or 6.6 times the India share of 4.3%.

The India company and China and other Asian countries, such as Pakistan, Bangladesh and Vietnam, have been fighting hand to hand in textile and clothing exports to Europe and the US market.

If India becomes a net importer of cotton, then the India company will have to compete with Chinese enterprises to compete for the source of cotton.

Khandelwal said: "we have already competed with other Chinese enterprises for other resources, and in the near future, we may compete with them for cotton.

Chinese experts agree with this view that they say China's high-end textile industry will further boost cotton demand.

In 2010/11, cotton consumption in China was about 10 million tons, compared with 6 million 600 thousand tons in the whole year.

Just as in India, China's cotton growing area is targeted at food and food is subsidized more by the government.

Guo Rongmin, China business manager of Cotlook limited, pointed out: "India has great potential for the development of the textile industry. With the development of the textile industry, India will become a net importing country in the next 5-6 years and compete with China for cotton resources" in Guo Rongmin.

By 2015, China's cotton demand is expected to rise to 13 million tons.

A senior Chinese official said in June that China's output was difficult to raise, and its output fell 6.9% to 5 million 960 thousand tons last year.

Chinese officials have not formally set targets for cotton production in 2015.

By the year 2019-2020, the consumption of India's domestic textile industry is expected to reach 7 million 20 thousand tons. Domestic residents' abandonment of polyester and the sharp increase in clothing exports will greatly boost cotton demand.

Raw cotton competition among Asian giants will inevitably stimulate price volatility in the global market.

Ajitesh Mullick, head of Religare's commodity agriculture research division, said: "it is clear that global cotton prices are bullish. However, due to many factors of price dependence, such as the demand of the United States and Europe, the production of natural fibers in other parts of the world, it is difficult to quantify the price rise."