As the rapid spread of Covid-19 in all the countries has led to a cancellation of apparel export orders in China’s factories, the country’s cotton consumption is likely to decline by 0.6-1 million tonne in 2019-20. This was reflected in the cotton futures market in China. The most actively traded May cotton contract dipped below 10,000 yuan/mt on Zhengzhou Commodity Exchange in the afternoon of March 24, once to the lowest of 9,935 yuan/mt, which was close to the historical low of 9,890 yuan/mt and has declined by 4,515 yuan/mt from 14,450 yuan/mt appeared on January 14 before the Chinese Lunar New Year.
Affected by the export orders, China’s domestic cotton consumption is expected to fall by nearly 1 million tons soon. If the state cotton reserves do not prolong, the stock/consumption ratio is forecast to 55 per cent, up 7 per cent from previous season. Global cotton consumption may also see large reduction with the ongoing pandemic.