ICAC - Cotton This Month
Posted : October 15, 2021

Cotton This Month 1 June 2021

Production, Consumption and Trade are Expected to Increase in 2021/22

For the current season, the global production estimate for 2020/21 has been reduced to 24.3 million tonnes this month with smaller crop estimates expected for India, Brazil, and the United States. For India, the latest meeting of the Committee on Cotton Production and Consumption (COCPC) reported production for 2020/21 at 6.12 million tonnes. With the country under crisis from a second wave of COVID-19, mill-use has been revised down to 5.15 million tonnes. Imports by India, under pressure from the recently imposed import tax, are expected to decrease to 187,000 tonnes for the season. With reduced supply and growth in exports, stocks in India are expected to decrease with the stocks-to-use ratio falling to 0.54. Production estimates for Brazil have been lowered since the start of the season to 2.5 million tonnes. The pace of trade thus far for the season signals that exports for Brazil could exceed 2 million tonnes reaching a new high. China is expected to import 2.4 million tonnes and consume 8.1 million tonnes, with ending stocks expected to rise to 9.1 million tonnes. Global trade for 2020/21 is expected at 9.8 million tonnes with the ending stocks expected to decrease to 21.9 million tonnes.

For the 2021/22 season, global production is expected to increase by 5% to 25.5 million tonnes with increases in planted area in the United States and West Africa. Production is expected to increase by 16% in the United States to 3.7 million tonnes. Higher prices to farmers have been announced in Mali and Burkina Faso for the 2021/22 season and thus area and production are expected to rebound for the region following the contraction this season. Production for West Africa is expected to recover with 38% growth to 1.47 million tonnes. Exports from the region are expected to continue to recover from the pandemic-related trade disruptions in 2019/20 and increase to over 1.4 million tonnes.

Area in China is expected to contract with production decreasing to 5.7 million tonnes. Area in Pakistan is expected to continue to contract by 5% with limited seed availability and production constraints. Global consumption for 2021/22 is expected to increase moderately by 2% to 25.3 million tonnes as the global
economy continues to recover. Trade is expected to increase to 10 million tonnes with import increases expected across all major consuming countries. Global ending stocks are expected to increase slightly to 22 million tonnes as the stocks-to-use ratio falls to 0.87. Stocks in China are expected to decrease as stocks in the rest of the world continue to rise. Cotton prices continue to be under pressure from lower polyester prices with the price difference between the two widening.

Prices

The Secretariat’s current price projection for the year-end 2020/21 average of the A Index is 81.9 cents per pound this month. The price projection for the year-end 2021/22 average of the A Index is 87.1 cents per pound this month. Cotton This Month is published at the beginning of the month with the Cotton Update published midmonth. The Cotton Update is a mid-month report with updated information on supply/demand estimates and prices. The next Cotton Update will be released on 15 June 2021. The next Cotton This Month will be released on 1 July 2021.

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