US & Global Cotton Production Pegged Lower as Compared to Previous Estimate, Global Cotton Consumption Estimated higher

The October month’s demand and supply report released by the US Department of Agriculture (USDA) indicates a lower production estimate by 1 percent as compared to September month’s estimate and the US cotton production is now pegged at 17.0 million bales for marketing year 2020/21. Meanwhile no change in the estimate is noted for US cotton mill consumption and ending stocks as compared with the previous month. At 7.2 million bales, U.S. ending stocks in 2020/21 are projected at 42 percent of use, compared with 41 percent in 2019/20. The report shows 2020/21 season-average price forecast for upland cotton at 61.0 cents per pound, which is 2 cents higher than last month and slightly above the final 2019/20 price of 59.6 cents.

Speaking on global context, the 2020/21 world cotton supply and demand forecast conveys reduction in the world cotton production, higher consumption and improving trade numbers, in addition to drop in lower ending stock estimate. These comparisons are with reference to September month’s estimated figures. The USDA has lowered the production of global cotton estimate in its latest report by more than 900,000 bales with lower production revisions for countries of Mali, Pakistan, and Greece, and increased its estimate for Nigeria’s cotton crop. Global Consumption is estimated 1.5 million bales higher versus last month’s forecast, mainly due to upside revisions for China and India. World trade is projected about 500,000 bales higher this month, reflecting a 500,000-bale increase in China’s projected imports, and on the export side, higher exports by Brazil and Uzbekistan offsetting a decline for Mali. World ending stocks in 2020/21 are now projected 2.7 million bales lower than in September, at 101.1 million bales, equivalent to 89 percent of consumption.

Figures in Million 480-Pound Bales  

Source: US Department of Agriculture