Global cotton stocks are expected to shrink by 3.2 million bales, according to the first global and U.S. cotton outlook for the 2021-22 season released by the USDA in February at the Agricultural Outlook Forum.
At the same time, world cotton production is expected to increase by 4.7%, with the most significant year-over-year growth being in Pakistan, Australia, Brazil, the United States and South Africa. ‘West, the USDA’s Foreign Agricultural Service (FAS) said in its statement. March 2021 report “Cotton: World Markets and Trade”.
Overall, strong growth in cotton consumption in 2021-2022 and tighter inventories are expected to support prices, with the A Index forecasting an increase of 7 cents to 90 cents / pound for the marketing year. “If achieved, it would be the highest in 8 years,” the report says.
The USDA had published the first 2021-2022 cotton balances for two countries – the United States and China. In the United States, “Production increased 17% to 17.5 million bales as area seeded remains stable and abandonments decline under normal weather assumption.” However, weather conditions, especially in Texas, present a significant downside risk. Consumption is expected to increase to 2.5 million bales, but still nearly 500,000 bales less than 3 years ago; exports are expected to remain at 15.5 million bales. As a result, ending stocks are expected to hit 3.8 million bales, a 5-year low. “Said the USDA.
China’s imports for 2021-2022 are expected to reach 11.0 million bales, unchanged from the previous year’s level, which was the highest level in 7 years. Continued growth in yarn and fabric production, coupled with lower domestic production, is expected to maintain strong imports in addition to the state reserve maintaining an optimal level of government-held stocks, including both imports and domestic supplies. Chinese consumption is expected to grow at a lower rate than the global average due to above average growth in 2020-2021. This is because China has achieved an earlier recovery in the impacts of COVID-19 compared to other major consumers, with the 2020-2021 consumption growth rate above the global average.
Fibre2Fashion News Desk (RKS)
As the global economy recovers from the severe recession of 2020, global cotton consumption is expected to increase by 4.1% during the 2021-2022 season, well above the long-term average rate of 1.7%, according to the US Department of Agriculture (USDA). This will be the second year in a row that global consumption exceeds production.
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