Having reached its highest levels in 2021, the United States’ imports of cotton products are expected to support record cotton consumption in marketing year 2021-22. As per International Trade Administration’s Office of Textile and Apparels (OTEXA) report, cotton imports in 2022 are likely to surge as production is likely to decline by 300,000 bales.
In 2021, US’ cotton products import touched $49 billion. Imports got a boost mainly because of growing demand for cotton apparel and home textiles in the country. Most US consumers spent their discretionary incomes on products rather than services. They opted for comfortable and soft knitted cotton garments besides investing in home purchases and home textiles. Moreover, pent-up demand from the previous year and an increase in discretionary income also boosted imports after 2020
China remains largest cotton product supplier
For 19th consecutive year, China remained the largest cotton product supplier to the US in 2021. Even Section 301 tariffs implemented in 2019 amid the US-China trade dispute and the US Customs and Border Protection’s Withhold Release Order on all cotton-derived products from the Xinjiang autonomous region, failed to dive US’ imports of cotton products. On the other hand, cotton imports from countries like China India Pakistan Vietnam Bangladesh made significant strides since that period. Imports from India, Vietnam, and Bangladesh also reached record levels in 2021 especially in December.
Despite rising inflation global cotton consumption has been on the rise. The 2021-22 Outlook global cotton production was lower by 300,000 bales due to smaller crop in India. Use is up slightly, just over 100,000 bales, and ending stocks are down significantly for the third consecutive month with a decrease of over 1.7 million bales.
US’ cotton products imports decline
With global uncertainties lowering prices on the Intercontinental Exchanges, global macroeconomic concerns outweighed strong US export sales and shipments in 2021. In addition, lower prices also led to negative carry of roughly 2.5 cents in the middle of February.
Contrary to prices in the US and India, spot prices in China and Brazil declined slightly during the month as China returned from Lunar New Year and a higher Brazilian real. The A-Index reachroughly 30 cents lower than domestic prices in China compared with 20 cents last year, owing partly to a stronger yuan relative to the US dollar.
