Indonesian Cotton Consumption Falls, U.S. Remains Top Exporter

JAKARTA, INDONESIA – Indonesia’s cotton consumption for 2019/20 has declined to a 10-year low of 2.4 million bales due to weaker domestic and overseas demand related to COVID-19. The U.S. has maintained its position as Indonesia’s largest supplier of cotton, accounting for 36 percent of imports. Indonesia produces less than one percent of domestic demand and remains dependent on imports, according to USDA’s Foreign Agricultural Service (FAS). Weaker domestic demand, competition with locally produced synthetic fibers, and reduced capacity utilization are expected to reduce overall cotton consumption. Brazil is expected to hold a 34 percent market share while India will follow with 7 percent. Indonesia’s milling industry remains hopeful for a recovery in demand during the first half of 2021 and received welcome news in October when the U.S. extended Indonesia’s benefits under the Generalized System of Preferences (GSP) trade program. Although not applicable to many textile and garment products, retaining GSP maintained Indonesia’s preferential duties on select textile exports with those of competitors. It also served as a boost for the Government of Indonesia (GoI), which has sought to attract foreign investment, including in the textile sector.
(SOURCE: All Ag News)