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Global cotton production at a four-year low in 2020-21

 

Global cotton production at a four year low in 2020 21The 14th USDA Cotton and Wool Outlook predict global cotton production in 2020-21 will decline to a four-year low of 116.2 million bales. This is also 5.5 per cent decline from production in previous year. In 2020-21, the area under cotton cultivation is also forecasted to decline by 6 per cent to 33.0 million hectare. The top four cotton-producing countries will account for 73 per cent of total global cotton production, with India remaining the leading producer. Of the remaining three, China will contribute 23 per cent to the total production, while the US and Brazil will contribute 15 and 10 per cent of global cotton production respectively

Prominent declines in Brazil, India and China

India’s cotton production in 2020-21 is likely to decline by 2 million bales. Its area under cotton cultivation is likely to decline 6 per cent toGlobal cotton production at a four year low in 2020 12.5 million hectares combined with a slightly lower yield expectation of 496 kg/hectare.

China’s cotton production in 2020-21is likely to decline by 3 per cent to 26.5 million bales, while that of Brazil’s is forecasted to decline 9 per cent to 12.0 million bales in 2020-21.Brazil’s total area under cotton cultivation is also expected to decline 2 per cent to 1,686 kg/hectare. In contrast, cotton production in Pakistan is projected to increase by 300,000 bales to 6.5 million bales. Cotton production in Australia is also likely to increase by 1.1 million bales to 1.7 million, while its area under cotton cultivation is forecast to grow to 180,000 hectares.

A 12 per cents increase in global cotton consumption

Despite reduction in estimates for world cotton mill use in July for both 2020-21 and 2019-20, global cotton consumption in 2020-21 is forecast to grow 12 per cent to 114.3 million bales or about 12 per cent above the revised 2019-20 estimate of 102.4 million bales.

In 2020-21, aided by adequate and relatively inexpensive cotton supplies, cotton mill use by all major countries is forecast to rebound. Use of mill cotton by China is forecast to account for 32 per cent of global cotton mill use in 2020-21, while in India it will account for an additional 20 per cent. The use of mill cotton by Pakistan is expected to account for 9 per cent, while that by Bangladesh, Turkey and Vietnam each will contribute to 6 per cent of global mill cotton use. Cotton trade across the globe is expected to rise by 4.5 per cent in 2020-21 to 41.8 million bales. Shipments from Brazil are expected to increase by 3 per cent to 9.0 million bales, while those from India are expected to increase by 1.5 million bales to reach 4.5 million bales.

China to lead cotton imports

In term of imports, China will be world’s leading importer of raw cotton with its imports rising by 24 per cent 9.0 million bales. The imports by Bangladesh and Vietnam are projected to increase by 6 per cent and 8 per cent to 7.1 million bales and 7.0 million bales respectively. Pakistan’s cotton imports are also expected to increase to 3.9 million bales.

Despite, world’s cotton reserves increasing to 102.8 million bales in 2020-21, stocks-to-use ratio is forecast to decrease from 99 per cent in to 90 per cent in 2020-21. However, as world cotton stocks outside of China are expected to be higher, the average world cotton price is expected to decline slightly.

 
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