World cotton production is forecast to increase by 6 percent and production is expected to increase in the growing countries of Australia, Brazil and the United States.
In its latest October cotton production and stock projections for the 2021-22 season, the International Cotton Advisory Committee (ICAC) has indicated that global fiber crop production will be around 25.7 million tonnes ( tm), which would be six times larger. percent from the previous year, but still below pre-pandemic levels.
Ending stocks for 2020/21 have been revised down to 20 mt, bringing global cotton supply to around 45.8 mt for the 2021/22 season. Global consumption is estimated at 25.9 mt.
The ICAC noted that world cotton trade remained at its highest levels in history in 2020/21. “The estimate of 10.29 million tonnes for next season shows that industry sentiment remains positive, especially given the strong levels of textile retail sales seen in many developed countries,” he said in his comment.
The ICAC Secretariat has projected a cotton price higher than the average for the season. “An index for 2021/22 ranges from 82 cents to 127 cents, with a midpoint of 101.60 cents a pound,” he added.
The latest price forecast is on the higher side of the previous forecast issued in August 2021, with an average A-index for the season for 2021/22 ranging from 73 cents to 125 cents, with a midpoint at 95.43 cents per pound. .
Renaissance in production
In particular, at the beginning of August 2021, the ICAC had indicated a reactivation of world production to 25 mt in 2021-22 with strong expectations for growth in consumption.
The Indian cotton scenario is likely to be bright. The trade estimates cotton production for the 2021-22 season at 395 lakh bales (170 kg each) compared to 356 lakh bales estimated for 2020-21. Despite heavy flooding that followed recent incessant rains in Gujarat’s producing regions, the harvest is likely to be around 105 lakh bale in the state. Trader sources estimate that the cotton carry-over stocks are lower than the previous season, around 80 lakh of bales with improved consumption.