Global cotton trade is either likely to remain stagnant or will rise marginally in the next global season despite production increasing by 3.3 per cent, says US Department of Agriculture (USDA). The association attributes this to the decline in consumption by China, Bangladesh, and Vietnam due to negative macroeconomic forces dampening consumer demand for goods. The World Bank and the Organization for Economic Co-operation and Development recently downgraded global economic outlook while the International Monetary Fund also projected a decline, as per USDA’s latest ‘World Markets and Trade’ outlook.
The decline in projected consumption is attributed to factors including the recent rise in cotton prices, high container rates and limited supply, besides rising inflation and hike in interest rates globally, including the Federal Reserve’s recent actions, the association added.
Next season’s global output is likely to reach 153.7 million bales (of 170 kg each) against 148.80 million, estimated USDA. India and China will produce 35.2 million bales each, it added. India’s cotton crop this season will increase by 12 per cent to 31.37 million bales, in line with the trade’s revised estimates, while China’s crop is projected at 34.5 million bales.
The USDA has lowered its global crop estimates for next season from 155.31 million bales a month ago. Subsequently, it lowered consumption for next season from its outlook a month ago. However, it will be marginally higher than the current season.
Consumption or next season is estimated at 153.49 million bales against 153.42 million bales this season. Global imports are estimated at 59.38 million bales against 55.48 million bales. However, they are lower than the June outlook of 60.81 million bales.