The Cotlook-A index has reported a sharp decline in the cotton prices for 2020. The prices slipped to 63.53-81.02 cents per pound in 2020 compared to the prices of 70.75-87.25 cents per pound in the prior year. The index remained in between 65.00-70.00 cents per pound from March-August 2020 and was lowest in April at 63.53 cents per pound.

The cotton prices moved down with decrease in global cotton demand by 7.60 million bales, or 6.40 per cent in March 2020, according to United States Department of Agriculture’s (USDA). The reduction was due to Covid-19 impacts on countries around the world.

It represented a loss of around 3.5 weeks of global spinning or about 16.00 per cent of the expected spinning in March through July based on the March USDA forecasts. The USDA report also noted that Covid-19-driven changes in behaviour and regulations significantly impacted the supply chain of the cotton sector. Recent travel restrictions in India, Pakistan, and Vietnam were likely to have similar impacts on cotton supply and demand in the short-term.

In addition to physical disruption across the global supply chain from farm to retailer, global cotton end-use had slipped amidst large portions of the global population limiting activity outside their homes or confined by stay-at-home orders and with many “non-essential” businesses including apparel stores closed. The two largest importers of apparel, EU and US, saw a widespread closure of shopping malls and retail stores, while three-quarters of US population were under travel restrict