According to the report of the USDA Agricultural Outlook Forum on February 24, global cotton production in 2022/23 is expected to be 124 million bales, an increase of 3.8 million bales or 3.2% year-on-year, the highest level since 2017/18. Cotton consumption is expected to It was 126.5 million packages, an increase of 2.1 million packages year-on-year, and a year-on-year increase of 1.7%. Global ending stocks fell by 2.5 million bales as global cotton consumption exceeded production.
From the perspective of output, due to the sharp rise in cotton prices, the cotton planting area in most cotton-producing countries around the world is expected to increase in 2022/23. However, it will also be tested by rising prices of competing crops and increased production input costs. China’s cotton output is expected to be 28 million bales, an increase of 1 million bales year-on-year. India’s cotton output is expected to be 28 million bales, an increase of 1 million bales year-on-year, and the cotton planting area is expected to increase by more than 5%. Pakistan’s output is expected to increase by 600,000 bales, and Turkey, Central Asia, Greece, and Egypt will also expand planting areas. In the southern hemisphere, Brazil’s output is expected to be flat year-on-year, and Australia’s output is reduced by 600,000 bales. This is because the yield has fallen back to the historical long-term average, and the weather has become normal, which may lead to a decrease in reservoir water storage.
In 2022, the cotton area planted in the United States is expected to be 12.7 million acres, the highest level in the past three years, a year-on-year increase of 13%, and 5.5% higher than the NCC’s forecast. The U.S. cotton abandonment rate is expected to rise to 20%, with a harvest area of 10.2 million acres, a year-on-year increase of 2%. Due to the increase in harvest area and the highest yield in the past four years, U.S. cotton production in 2022/23 is expected to be 18.2 million bales, a year-on-year increase of 3%. Adding 3.5 million bales of opening stocks, the total U.S. cotton supply in 2022/23 is 21.7 million package, the second lowest in the past five years. Domestic cotton consumption in the United States is expected to increase slightly, and exports are expected to be 15.5 million bales, higher than this year’s 14.75 million bales, as global consumption continues to increase, logistics problems are expected to be resolved, and U.S. cotton supply increases next year. The U.S. ending inventory is expected to be 3.6 million packages, an increase of 100,000 packages year-on-year, and the inventory-to-consumption ratio remains stable. The average farm price of U.S. upland cotton is expected to fall to 80 cents/pound from the current 90 cents/pound.
From a consumption perspective, considering factors such as the possible harm caused by the mutation of the new coronavirus strain and the impact of the situation in Eastern Europe on the global economy, the global consumption forecast for 2022/23 may also be lowered. At present, positive factors for cotton consumption include: consumers prefer cotton-containing products in clothing purchases due to remote working, supply chain problems make purchasers eager to replenish raw material inventories, and increased profits of cotton mills prompt factories to expand production capacity. Unfavorable factors include: slowing global economic growth, rising cotton prices, and excessive polyester-cotton price differences. Consumer spending, logistics and employment issues While generally positive for cotton consumption, the trend of consumer spending shifting from goods to services is also a potential headwind.
In 2022/23, global cotton trade volume is expected to be 48.5 million bales, China’s import volume is expected to be 11 million bales, and imports from Vietnam and Bangladesh will also increase. Meanwhile, exports from the United States, Brazil and Greece are expected to increase. Global ending stocks are expected to be 81.7 million bales, down 3% year-on-year, falling for the third consecutive year, with the decline mainly coming from India. U.S. and global cotton prices are expected to fall in 2022/23 despite lower global inventories and increased consumption. After rising to an 11-year high, the average price of the Kotruk A Index is expected to fall 30 cents from the high to 95 cents/lb.
</p
