Supply and demand imbalance will lead to price rises for cotton
World cotton production for the 2021/22 season has been revised down to 24.9 million tonnes, with area under cotton also revised to 32.8 million hectares, mostly because of lower US crop.
ICAC said: “On the supply side, growing infections in cotton-consuming and textile-supplying countries like Bangladesh and Vietnam have created a perfect mix for a bullish market.
“Until December 2020, production seemed to outpace consumption for the season. However, consumption estimates currently formed on the pace of recovery at the end of the 2020/21 season showed a refreshing recovery, whereas the 2020/21 season saw cotton production fall by 7% to 24.2 million tonnes, with double digit decreases in crop size reported from the US, Brazil, Pakistan, West Africa and Turkey.”
The US remained the world’s largest exporter with 2020/21 exports at 3.6 million tonnes, amounting for 34% of total global exports, benefiting from the US-China Phase One Economic and Trade Agreement signed in January 2020, which covers cotton and mandates China to increase its imports (of agriculture and other sectors) from US.
