USDA’s first forecast for 2021/22 shows record global supply driving use higher as recovery from the COVID-19 pandemic continues. Global cotton consumption is expected to grow 3.5 percent to almost 122 million bales, higher than the pre-pandemic 2018/19 level.
However, lingering pandemic related disruptions (i.e. reduced consumer demand and logistical issues) are expected to keep global use below the 2017/18 record level.
All top ten consuming countries are expected to witness growth. India is up 2.0 million bales, accounting for nearly one-half of the growth in global use. Cotton Consumption growth in Pakistan, Turkey, and Bangladesh is expected at or above the long-term world growth rate of around 2 percent.
Cotton consumption in Vietnam is also forecast to increase.
Global ending stocks are forecast lower on smaller beginning stocks and consumption exceeding production for the second consecutive year. Stocks in China and India are both expected to decline by more than 1.5 million bales.
China’s share of global stocks will decline to the second-lowest level in 11 years. India’s consumption growth will exceed the expected increase in production and lower stocks to their lowest level in 3 years. Stocks in the United States are also expected to decline.
Brazil stocks are expected to increase due to the arrival of the second-largest projected crop at the end of the marketing year.
World trade is expected to contract slightly in 2021/22 from 2020/21, the highest in 8 years. Shipments from the United States and Brazil are projected down on lower exportable supplies due to significantly lower carryin.
Australia’s exports are forecast to more than double on dramatically higher production, with improved prospects relative to the extreme drought in 2020/21. India’s exports are up as higher world prices allow for the reduction of government-controlled stocks.
The second-highest projected global imports in 9 years will be driven by higher global consumption relative to the previous year. China is projected to be the world’s largest importer for the second consecutive year, although imports are forecast lower than the previous year’s 8-year high. This follows the State Reserve’s expected to return to replenishing stocks with foreign and domestic supplies.
Pakistan imports are down slightly from the previous year’s record but significant due to the highest expected consumption level in 3 years and lower carryin.
The U.S. season-average farm price for 2021/22 is forecast at 75 cents per pound, 7 cents above the previous year.
2020/21 Outlook
For 2020/21, the May forecast shows lower global beginning and ending stocks. Cotton’s production and consumption are changed marginally from last month. Higher U.S. and Brazil export more than offset lower India shipments; Vietnam, China, and Bangladesh imports are projected up and more than offset slower demand from Malaysia and Taiwan.
Global ending stocks are projected down as larger exports in the United States and Brazil lower their stocks and more than offset higher levels in China.
The U.S. forecast has higher exports and the lowest projected ending stocks in 4 years. The U.S. season-average farm price is unchanged at 68 cents per pound.
