As per USDA, global cotton consumption is expected to grow by 4.1 per cent in 2021-22 season, substantially above the long-term average rate of 1.7 per cent This will be the second consecutive year when world consumption will exceed production.

World cotton stocks are expected to reduce by 3.2 million bales, according to the initial world and US cotton outlook for the 2021-22 season released by USDA in February at the Agricultural Outlook Forum.

Meanwhile, world cotton production is expected to rise by 4.7 per cent with the most significant year-over-year growth in Pakistan, Australia, Brazil, the United States, and West Africa, the Foreign Agricultural Service (FAS) of the USDA said in its March 2021 report 'Cotton: World Markets and Trade'.

Overall, strong cotton consumption growth in 2021-22 and tightening stocks are expected to support prices with the A-Index forecast up 7 cents to 90 cents/pound for the marketing year id.

China’s 2021-22 imports are forecast at 11.0 million bales, unchanged from the previous year’s level, which was the highest level in 7 years. Further growth in yarn and fabric production, coupled with lower domestic production, is expected to maintain strong imports in addition to the State Reserve maintaining an optimal level of government-held stocks comprised of both imports and domestic supplies. China’s consumption is projected to increase at a rate below the world average due to above average growth in 2020-21.