Business India ×
  Magazine:
MSMEs

Published on: Jan. 12, 2021, 5:10 p.m.
India, US gear up for challenges
  • India is an important trade partner for US cotton, with every second bale imported into the country being produced in the US

By Arbind Gupta. Assistant Editor, Business India

In a Covid-19 era, sustainability in cotton production aligned with UN sustainability goals is the way forward for the industry as a whole – especially since the onus is now on brands and their supply chain partners to demonstrate their environmental credentials, coupled with greater supply chain scrutiny and demand for traceability. The cotton textile industry, along with the stakeholders involved in the cotton supply chain, is gearing up further to strengthen the sustainability and circular economy aspect in their businesses. Experts are of the view that, as the cotton economy is badly impacted due to Covid-19 this will be the only way forward in the medium to long run, though some sporadic efforts are already in place in the short term.

In a recently-organised first ever virtual Cotton Day India 2020 themed Leading through change: Your partner for a new world by Cotton Council International (CCI), along with the leadership of the US cotton industry, experts and panellists emphasised the need for creating a sustainable cotton value chain in the rapidly changing global market place. This is significant, as representatives of the Indian textile industry, as also US Department of Agriculture, National Cotton Council of America, Supima and the CCI had participated in the progamme. CCI, the export promotion arm of the National Cotton Council of America (NCC) and a non-profit trade association, promotes US cotton fibre and produces cotton products around the globe with its Cotton USA trademark.

The keynote address on Indian cotton update was delivered by Lazaro Sandoval, Senior Agricultural Attaché, USDA Foreign Agricultural Service (FAS). Also stressing the importance of leadership through crisis, sustainability and retail scenario post-Covid-19 was Michael Duke, former CEO, Wal-Mart.

“India is an important trade partner for US cotton, with every second bale imported into the country being produced in the US,” informed Bruce Atherley, Executive Director, CCI, speaking at the Cotton Day India 2020. “One of the key factors for this is ‘trust’ associated with US cotton. Quality, transparency, sustainability and the premium value of US cotton fibre has created a preference for this cotton. We are also the first country in the world to offer 100 per cent, high-volume, instrument-tested bales to ensure that clients/mills get what they order. As the world grapples with Covid-19, we are seeing a steady increase in customers demanding more sustainable products.”

“To enable mills and manufacturers to combat these pre-existing and more recent pressures, Cotton USA has introduced its new, game-changing Cotton USA Solution technical consultancy programme,” Atherley added. “With access to our first-of-its-kind industry initiative, businesses can equip themselves with the resources, data and opportunities they need for next-level success and profitability.”

Cotton USA Solutions is a technical consultancy programme that helps mills and manufacturers achieve greater productivity, process efficiency and ultimately profit for their businesses. It has established a consulting team comprising mill and spinning experts from around the world. The team of experts has created five business-building programmes, providing expertise informed by work with over 1,500 mills in 50 countries.

“Cotton USA Solutions is designed so that textile mills and manufacturers can optimize the use of US cotton with cutting-edge offerings to transform their businesses profitably,” Atherley believes. “Given the industry’s current state due to the Covid-19 pandemic, the resources and expertise of this programme are more relevant to our partners than ever.”

“The Trust Protocol has set new standards for sustainable cotton production by bringing quantifiable and verifiable goals and measurement mapped to six key sustainability metrics,” informed Gary Adams, president, US Cotton Trust Protocol. “They are: land use, soil carbon, water management, soil loss, greenhouse gas emissions and energy efficiency.”

“The US cotton industry has a history of strong relationship with India,” added Peush Narang, CCI’s India representative. In 2019, cotton was the second highest exported agricultural commodity from US to India.

First choice 

The US is India’s largest exporting partner for cotton apparel. Global brands and retailers have always looked up to India for textile products, especially made from cotton. US cotton has been the first choice, whenever mills need to export high quality yarns. “India has been amongst the top two users of Supima, an extra-long staple cotton grown in the US,” Narang affirmed.

Though India is the second largest producer of cotton after China, with its production touching 35.7 million bales in the 2019-20 cotton season, it still imports about 2 million bales of long and extra-long staple cotton. During the cotton season 2019-20 (October-September), India’s production surged by 8.18 per cent over what was recorded in the previous season. Recently, Cotton Association of India (CAI), in its December estimates, has increased its cotton crop estimate for the 2020-21 season by 250,000 bales to 35.8 million bales of 170 kg each. The previous year’s estimate was 35.6 million bales. 

Due to Covid-19, at $105 million, exports of cotton from the US to India during January-September 2020 have seen an almost 80 per cent reduction in shipments over the previous year. In CY2019, cotton exports to India from the US were valued at $587 million, the highest on record. In fact, during the year, cotton was the second highest exported agricultural commodity from the US to India, which is the fifth largest market for cotton exports after Vietnam, China, Turkey and Pakistan.

The February 2020 USDA forecast for world use in 2020-21 was 121 million bales -- up 1.7 per cent from the 2019-20 forecast made the same month. As the extent of the Covid-19 impacts became clearer, the 2020-21 world use forecast was slashed. However, as components of the world economy have recovered, use has edged up in recent months and is now only 3 per cent below February 2020. The forecast for world use in 2019-20 fell 14 per cent between the February and December forecasts as spinning mills dramatically reduced operations. 

With global use forecast down and production largely unaffected, 2020-21 ending stocks are forecast higher at 97.5 million bales of 480 lb, which is 19 per cent (15.4 million bales) above the February 2020 Outlook. Prices, which had been trending up before the pandemic, retreated sharply from January to April, with the NY futures falling to a 10-year low. However, prices have rallied and now exceed pre-pandemic levels as mill use recovers and other factors support the recent strength.

Don't miss this

Cover Feature

Double impact

The merger drive is expected to make Jindal Stainless a more formidable entity both within the country and outside

Corporate Report

Midhani moves up the value chain

This mini-ratna PSU promises to scale up fast in the future and become a full-fledged navratna

Focus

The battle over MSP

Any government keen on tackling the issue will need the political will and financial resources which currently seem to be in short supply

Corporate Report

Transformation of KEC

KEC’s recent endeavour towards mechanisation and digitalisation has been a major success story

Our letter to you, once a week.
Register with The CSR Weekly for free!

E-MAGAZINE
Jindal Stainless-Double Impact
New Prescription
COP26 Race to NET ZERO
FROM THIS ISSUE

Selections

Enterprise

Corporate Report

Aviation

Cover Feature

Books

Social Responsibility

Healthcare

Goodyear India partners Americares India Foundation

Published on Feb. 2, 2021, 9:21 p.m.

The partnership will support COVID-19 healthcare facilities in Faridabad and Aurangabad

Environment

Tata Motors launches a 'Go Green' initiative

Published on Dec. 23, 2020, 10:34 a.m.

The company will plant a sapling for the sale of every new commercial vehicle

Women Empowerment

Tata Starbucks ties up with Educate Girls to empower women

Published on Dec. 2, 2020, 3:10 p.m.

The partnership aims to provide volunteering and educational support to those who have relocated to urban cities from villages

Environment

Indian Oil has a social initiative for a clean and green world

Published on Nov. 25, 2020, 2:53 a.m.

The public sector company is planting a tree for every retail customer visit during its TreeCheers campaign period

Climate Change

Green Buildings

Buildings to go green by 2050!

Published on Nov. 24, 2021, 6:34 p.m.

CII’s green building council takes a leaf out of India’s Glasgow pledge

Energy

IEX resumes trading

Published on Nov. 24, 2021, 6:30 p.m.

Of about 1,381 billion units of electricity consumed in India, only 7 per cent is traded on power exchanges

Air Quality

The black carbon threat

Published on Nov. 24, 2021, 6:13 p.m.

India and China are the biggest contributors of black carbon – the chief aerosol pollutant

Energy

Jindal to build coal mine in Botswana

Published on Nov. 24, 2021, 6:11 p.m.

The company is shortlisted for a 300MW coal-fired power plant in the country

Stay ahead of the times.
Register with The Climate Change Weekly for free!