A global shortage of cotton is worsening rapidly due to a delayed harvest in the US. Poor weather in the US this past spring forced farmers to plant later than usual, affecting the harvest. While new cotton has finally started to reach the market, the supply crunch has not been resolved partly due to a personnel shortage in the logistics sector. Cotton inventories have declined to the lowest level in 10 years for products that are certified by the US-based Intercontinental Exchange (ICE).
Cotton needs to meet certain standards such as fiber length to be included in ICE’s inventory, but the harvest delay has impacted the inspection process. Furthermore, strong demand means that a lot of cotton is being exported before being warehoused, another factor behind low inventories.
Stockpiles plunged by more than 90 per cent over a month through the end of November, at one point falling to 194 bales. While the figure has recovered to roughly 400 bales, it is still well short of the tens of thousands of bales usually stockpiled. Delays in container shipments between the US and China are also taking a toll, with deliveries said to be about two weeks slower than usual.