Cotton This Month Major changes (larger than 40,000 tonnes): Brazil 2020/21: production 2.65 million tonnes (-86,500 tonnes) Pakistan 2020/21: imports 1.06 million tonnes (-44,100 tonnes) 2020/21: consumption 1.9 million tonnes (-44,100 tonnes) Turkey 2020/21: production 656,000 tonnes (-43,800 tonnes) Uzbekistan 2020/21: production 552,000 tonnes (-164,600 tonnes) 2020/21: consumption 491,000 tonnes (-122,900 tonnes) 2020/21: exports 60,000 tonnes (-41,700 tonnes) Minor changes (less than 40,000 tonnes): Australia million tonnes change million tonnes change million tonnes change Beginning Stocks 18.78 0.24 18.51 0.24 21.18 0.24 Production 25.92 0.00 26.21 0.00 24.10 -0.31 Supply 44.70 0.24 44.72 0.24 45.28 -0.06 Consumption 25.98 0.00 22.77 0.00 24.10 -0.15 Exports 9.26 0.00 9.02 0.00 9.33 -0.05 Ending Stocks 18.51 0.24 21.18 0.24 21.18 0.09 ICAC Price Projections Season-average Cotlook A Index (US cents per pound). Projections Range Midpoint Range Midpoint 2020/21* 61-81 69 67-82 73 01 February 2021 * The price projection for 2020/21 is based on the ending stocks-to-mill use ratio in the world-less-China in 2018/19 (estimate), 2019/20 (estimate) and 2020/21 (projection), on the ratio of Chinese net imports to world imports in 2019/20 (estimate) and 2020/21 (projection), and the average price in 2019/20. The projection reflects a 95% confidence interval. Changes in Supply and Demand Estimates (from 15 January 2021) World Cotton Supply and Demand 2018/19 2019/20 2020/21 Previous Month This Month
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Cotton This Month
Major changes (larger than 40,000 tonnes):
Brazil 2020/21: production 2.65 million tonnes (-86,500 tonnes)
Pakistan 2020/21: imports 1.06 million tonnes (-44,100 tonnes)2020/21: consumption 1.9 million tonnes (-44,100 tonnes)
Turkey 2020/21: production 656,000 tonnes (-43,800 tonnes)
million tonnes change million tonnes change million tonnes change
Beginning Stocks 18.78 0.24 18.51 0.24 21.18 0.24
Production 25.92 0.00 26.21 0.00 24.10 -0.31
Supply 44.70 0.24 44.72 0.24 45.28 -0.06
Consumption 25.98 0.00 22.77 0.00 24.10 -0.15
Exports 9.26 0.00 9.02 0.00 9.33 -0.05
Ending Stocks 18.51 0.24 21.18 0.24 21.18 0.09
ICAC Price ProjectionsSeason-average Cotlook A Index (US cents per pound).
Projections
Range Midpoint Range Midpoint
2020/21* 61-81 69 67-82 73
01 February 2021
* The price projection for 2020/21 is based on the ending stocks-to-mill use ratio in the world-less-China in 2018/19 (estimate), 2019/20 (estimate) and 2020/21 (projection), on the ratio of Chinese net imports to world imports in 2019/20 (estimate) and 2020/21 (projection), and the average price in 2019/20. The projection reflects a 95% confidence interval.
Changes in Supply and Demand Estimates (from 15 January 2021)
World Cotton Supply and Demand
2018/19 2019/20 2020/21
Previous Month This Month
www.icac.org
Cotton This Month 1 February 2021
Expansion in Trade as Recovery Continues
Production
Global production for 2020/21 is currently estimated at 24.1 million tonnes, an 8% decrease from the previous season with decreases coming from several major producers. Double digit decreases in crop size are reported from the United States, Brazil, Pakistan, West Africa, Turkey and Uzbekistan. The US crop of 3.3 million tonnes would be 25% smaller based on reduced area. Production from Brazil is expected to contract by 12% to 2.65 million tonnes as area decreases to 1.5 million hectares. Production in Pakistan is expected to contract by 33% to 890,000 tonnes from a decrease in planted area, monsoon damage and pest infestations. Production in Turkey is estimated 20% lower at 656,000 tonnes, where cotton area continues to decrease due to input costs. In Uzbekistan, area and production are expected to be 20% lower as farmers appear to move away from the cluster system under the agricultural reform. For the world’s two largest producing countries, the 2020/21 crop is expected to increase in both India and China with India’s crop to increase to 6.2 million tonnes and China’s crop to increase to 5.9 million tonnes. Current agricultural reforms in India may impact next season’s area. As China’s Xinjiang cotton and textile industry has faced international scrutiny, improvements in traceability may need to be implemented globally before impacting production levels in the region.
With production decreases in several consuming countries that rely on domestic production, trade is expected to rebound in 2020/21 to 9.3 million tonnes. Following the trade contraction stemming from pandemic related slowdowns in 2020, consumption and trade are expected to increase as manufacturing activities regain pace and consumer demand recovers.
Trade
With production shortfalls in Pakistan, the domestic textile industry will require additional quantities to meet mill needs. Imports by Pakistan are forecasted to double in 2020/21 to meet the deficit. Since the start of the season, the pace of imports has increased tenfold, with largest share of imports increasing from the US and Brazil.
Pakistan Imports Month to Month Increases in 2020/21
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The United States will remain the world’s largest exporter with 2020/21 exports currently estimated at 3.3 million tonnes. Benefitting from trade agreements with China, total US exports have thus far outpaced the previous season by 45% with exports to China, over this period, increasing by 600%. The share of US exports to countries appears to have shifted over the first four months of the season with shares to China increasing as shares to Vietnam, Bangladesh, Indonesia and India decease from 10-25%. India, well-supplied from the previous seasons carryover and current season production, is expected to have exports increase to over 1 million tonnes, even as the domestic textile industry remains well-supplied. Exports from Brazil are on track to match or exceed the previous season with exports increasing 17% over the previous period. The pace of exports to major destinations of China, Vietnam, Pakistan and Turkey have increased 25-60% over the previous period for the world’s fastest growing exporter.
Exports from USA and Brazil Remain Strong
Consumption The global production estimate has been reduced this month to 24.1 million tonnes with consumption currently estimated at 24.0 million tonnes. Ending stocks for the 2020/21 season are now estimated at 21.1 million tonnes, reducing pressure on prices. The global stocks-to-use ratio, measuring tightness of stocks to relative use, is expected to fall to 0.88 by the end of the season. In 2020/21, the global S/U ratio had risen to 0.98 indicating sufficient supply for nearly a year’s worth of cotton lint availability with no additional cotton needing to be produced. Newly approved vaccines should provide additional assistance for the recovery, but ultimately the success of vaccination efforts will offer the needed impacts to consumer confidence and economic recovery. The IMF’s most recent forecast has been revised to 5.5% growth in 2021. While the strength of recovery will vary across countries, China’s economy is forecast to continue to expand by 8.1%. Prices The Secretariat’s current price projection for the year-end 2020/21 average of the A Index is 73.5 cents per pound this month. Cotton This Month is published at the beginning of the month with the Cotton Update published mid-month. 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 February 2021. The next Cotton This Month will be released on 1 March 2021.
Ending StocksWorld Total 20.47 18.68 18.78 18.51 21.18 21.18China 12.65 10.35 9.03 8.88 8.94 8.80USA 0.83 0.60 0.82 0.83 1.31 0.73Ending Stocks/Mill Use (%) World less China 3/ 47 50 54 54 79 77 China 4/ 166 125 106 108 123 110Cotlook Index A 5/ 70.39 82.77 87.98 84.35 71.33
1/ The inclusion of linters and waste, changes in weight during transit, differences in reporting periods and measurement error account for differences between world imports and exports.2/ Difference between calculated stocks and actual; amounts for forward seasons are anticipated.3/ World-less-China's ending stocks divided by world-less-China's mill use, multiplied by 100.4/ China's ending stocks divided by China's mill use, multiplied by 100.
01 February 2021
5/ US cents per pound.
2018/19 Supply and Use of Cotton by Country 1 February 2021
Area Yield Prod Beg Stocks Imports Cons Exports End Stocks S/U * S/MU **000 Ha Kgs/Ha 000 Metric Tonnes Ratio Ratio
World Total 33,281 779 25,921 18,782 9,054 25,983 9,256 18,513 0.71 0.71*/ Ending stocks divided by consumption plus exports. Subtotals and total include countries not shown.**/ Ending stocks divided by consumption.
2019/20 Supply and Use of Cotton by Country 1 February 2021
Area Yield Prod Beg Stocks Imports Cons Exports End Stocks S/U * S/MU **000 Ha Kgs/Ha 000 Metric Tonnes Ratio Ratio
World Total 34,782 754 26,209 18,513 8,258 22,771 9,023 21,176 0.93 0.93*/ Ending stocks divided by consumption plus exports. Subtotals and total include countries not shown.**/ Ending stocks divided by consumption.
2020/21 Supply and Use of Cotton by Country 1 February 2021
Area Yield Prod Beg Stocks Imports Cons Exports End Stocks S/U * S/MU **000 Ha Kgs/Ha 000 Metric Tonnes Ratio Ratio
World Total 31,364 768 24,098 21,181 9,331 24,095 9,331 21,183 0.88 0.88*/ Ending stocks divided by consumption plus exports. Subtotals and total include countries not shown.**/ Ending stocks divided by consumption.