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Global cotton prices to rise to $1.72 per kg in 2021

 

Global cotton prices to rise to 1.72 per kg in 2021Although cotton production is projected to increase by 5 per cent in 2021, it is unlikely to return to 2019 levels. Demand on the other hand, is expected to outpace supply leading to a rise in global cotton prices. As per a World Bank report, the global average price of raw cotton will rise to $1.72 per kg in 2021.

Favorable weather, increase in area to boost cultivation

The main factors driving up prices rise is increasing demand from global markets, says Indexbox’s new report ‘World Cotton Lint-Market Analysis-Forecast, Size, Trends and Insights’. It states, favorable weather conditions and increase in area under cotton cultivation will boost yields in the US by 523 tons, in Brazil by 436 tons, Australia 239 tons and Pakistan 174 tons during the year. On the other hand, production in China will decline giving way to India to increase its share of cotton production to 24 per cent. Pakistan, India, Bangladesh, Vietnam, Turkey and China will be the major demand drivers of cotton lint in 2021. China in particular, will step up imports as local production will not be able to meet domestic demand.

Recycling technologies to curb water consumption

In 2021, growth in cotton market will be challenged by strong competition from other natural and functionally similar materials such as hemp or flax asGlobal cotton prices to rise to 1.72 per kg in well as synthetic textile materials. Farmers will prefer growing hemp for its convenience and lower water consumption. Also, cotton requires large amounts of pesticides and is often grown by countries employing forced labor. This compels many apparel manufacturers to divert their supply chains towards more ethical suppliers. In order to make cotton production more sustainable, industry leaders need to introduce a new cost-effective recycling method that also reduces water consumption.

India’s cotton exports decline in 2020

In 2020, India’s cotton lint exports decreased for first time since 2016 by 9.2 per cent. India exported 965,000 tons of cotton lint during the year followed by Brazil which exported 865,000 tons. Together, the two countries made up 23 per cent of global cotton lint exports. They were followed by other exporters including Benin, Greece, Cote d'Ivoire, Burkina Faso, Nigeria, Australia and Uzbekistan which together made up 19 per cent of total exports.

The US was the largest exporter of cotton lint during the year in value terms. It exported 46 per cent of global cotton lint followed by India and Brazil. The average price of cotton lint exports declined 6.9 per cent in 2020 to $1,616 per tons. Nigeria commanded the highest price for cotton lint exports at $2,222 per tons followed by Uzbekistan whose exports were priced at $1,823 per ton and India whose cotton lint exports fetched $1,501 per ton.

China the largest cotton lint importer

After growing for nearly three years, cotton lint imports declined by 16.8 per cent to 7.1 million tons in 2020. Value also declined to $12.2 billion during the year. With 1.9 million tons, China was the largest importer of cotton lint during the year followed by Vietnam with 945 tons and Pakistan 819 tons. Together the three countries along with Turkey and Indonesia imported 79 per cent of world’s cotton lint. In value terms, China imported 29 per cent of global cotton lint. Imports amounted to $ 3.6 billion second largest importer Vietnam imported $1.4 billion. Pakistan was the third largest importer of cotton lint with a 12 per cent share.

The average price of cotton lint imports declined 5.3 per cent in 2020 to $1,706 per tons. India’s imports were priced highest at $1,979 per ton followed by China at $1,929 per ton, Viet Nam at $1,486 per ton and Turkey at $1,519 per ton were amongst the lowest.

 
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