Recently, the Federal Government of India has completely waived tariffs on imports of ultra-long staple cotton, according to the notice, reducing the import tax on “cotton, not coarsely carded or combed, and the fixed length of the fiber exceeds 32 mm” to zero. A senior executive of an Indian company said that this decision reflects the positive measures taken by the government to address industry feedback and adjust import regulations accordingly, bringing great benefits to the Indian textile industry’s production and sales and exports, and easing the pressure on end consumers.

According to industry analysis, India’s cancellation of import tariffs on long-staple cotton may have a certain impact on domestic cotton planting and farmers’ income in 2024, and not only India’s long-staple cotton and fine staple cotton prices are also facing greater upward pressure. Some international cotton traders and cotton trading enterprises said that the Indian Ministry of Finance has “loosened” the tariff policy on long-wool cotton, or to test and pave the way for the implementation of tariff exemption for the entire cotton import from April to October 2024.

Why did India remove import duty on long staple cotton? Industry analysis is mainly driven by the continued growth of India’s domestic demand for long staple cotton (Sino-US trade war, the new coronavirus epidemic, India’s cotton textile industry upgrading and other factors, A large number of European and American high-count yarn high-value-added orders transferred to India production), India’s domestic long-staple cotton grade and quality indicators can not meet the requirements of high-count yarn matching cotton (MCU5 and other auxiliary raw materials) and Indian yarn mill spinning high-count yarn needs to reduce costs, improve competitiveness and other factors caused.

As the 2023/24 United States Pima cotton planting area, production are significantly decreased (USDA 2023/24 crop planting intention report shows that the Pima planting area of 154,000 acres, a decrease of 16%), the Egyptian government on the Jiza cotton export phase ban, Indian cotton mill long staple cotton imports also face competition from buyers in China, Vietnam, Bangladesh and other countries, if you add 11% import tariffs, the cost of the cotton mill is “too high to be cold”, and the difficulty of enterprises to receive orders and make profits is greater.

From the survey point of view, since the Spring Festival, although ICE cotton futures have risen sharply, American cotton, Australian cotton, Brazilian cotton and other spot/cargo quotes have risen, but the international market of long-staple cotton FOB/CNF quotes continue to oscillate down, and ICE, fine wool cotton spot trend is very different. February 22-23, China’s main port February/March shipment of the United States Pima cotton 2-2 46/48 (strong 38/40GPT, 2023/24 new cotton) net weight quote 222-225 cents/pound; The price of bonded Pima cotton 2-246/48 (strong 38/40GPT) in 2022/23 also reached 210-215 cents/pound, which was 2-3 cents/pound lower than that before the Spring Festival, and was not outstanding.

Source: China Cotton Information Center