As per latest update from United States Department of Agriculture (USDA), Indonesia's cotton use is forecast to continue growing in 2018/19, driven both by textile exports and election-year demand for campaign clothes. In addition, higher prices for imported synthetic fibers relative to local cotton yarn will provide opportunities to increase cotton consumption. Furthermore, a Minister of Trade led July 2018 delegation to the United States resulted in concrete sales and a stronger commitment to increase U.S. purchases. Finally, the local industry reports that U.S.- China trade tensions has created opportunities for Indonesia's textile exports to the United States, further underpinning demand for U.S. cotton. While the weakening rupiah relative to the U.S. dollar has driving up imported raw material costs, the currency movement has also helped exports, leading textile companies to focus even more on exports. A major buyer of cotton reports increasing exports to 60 percent of total production from 54 percent. Efforts to increase exports are also supported by several recently bilateral trade agreements, e.g. with Japan (IJ-EPA, Indonesia - Japan Economic Partnership Agreement) and China (AC-FTA, ASEAN - China Free Trade Agreement). Total textile exports are forecast to increase about 9 percent in 2018. The industry also has big expectations for the Indonesian - European Comprehensive Economic Partnership Agreement (IEU-CEPA), which is supposed to be concluded in 2019. In line with growth in textile exports, 2018/19 cotton imports are forecast to increase to 3,550 million bales. In 2017/18, the United States was the leading cotton supplier with 42.9 percent market share, followed by Brazil (25.5 percent), and India (7.8 percent) Powered by Commodity Insights
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