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Higher (cotton) consumption and lower production expected to draw down ending stocks in 2020/21
Story Date: 3/2/2021
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Source: INTERNATIONAL COTTON ADVISORY COMMITTEE, 3/1/21
Executive Summary
Highlights from the March 2021 Cotton This Month include:
• The cotton consumption forecast has been revised upward to 24.5 million tonnes for the 2020/21 season
• The production forecast has been revised downward
• As a result, ending stocks are forecast to decrease by 1% to 21.1 million tonnes
• This month, the Secretariat’s price projection for the year-end 2020/21 average of the A Index is 75.7 cents per pound
Higher Consumption and Lower Production Expected to Draw Down Ending Stocks in 2020/21
The 2020/21 cotton consumption forecast has been revised upward this month from 24.2 million tonnes to 24.5 million tonnes, and while the projected 7% year-over-year increase isn’t nearly enough to offset the losses caused by the pandemic, it’s expected to outpace production, thus drawing stocks down by the end of the season. Stock levels are expected to drop to 21.1 million tonnes by the end of 2020/21, which would represent a 1% decrease from the previous season.
The Secretariat is projecting an increase in global trade. Both China and Pakistan are forecast to increase imports, the former benefitting from the price gap between domestic and foreign cotton and the latter due to a decrease in domestic production.
This month, the Secretariat’s price projection for the year-end 2020/21 average of the A Index is 75.7 cents per pound.
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