World cotton stocks to fall in 2020/21 on lower output, higher consumption

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World’s cotton ending stocks are expected to decline by 3.9 million bales during 2020/21 at 97.5 million bales, reflecting lower production and higher consumption, according to the US Department of Agriculture (USDA). The stocks will drop by 1.9 million bales from last year’s level.

The decline in production by 2.2 million bales during the year is expected to be led by the US, followed by India and Pakistan as well as other nations.

US production is expected to decline by 900,000 bales, while that of India and Pakistan by 500,000 bales compared to estimates of last month.

At the same time, consumption is expected to increase by 13% or 1.6 million bales to 115.6 million bales.

USDA said it had revised upwards India’s consumption estimate by 1 million bales while that of China by  500,000 bales.

Meanwhile, the Cotton Association of India (CAI) has projected the total production of cotton at 356 lakh bales for the crop year 2020-21, which is 4 lakh bales less than the year ago period.

During the 2019-20 crop year, the total cotton production stood at 360 lakh bales, CAI said in a statement. India’s cotton crop year begins from October 1.

India’s crop output is estimated to reduce during the current season on account of damage reported to the crop in some pockets due to the excess rains and pink bollworm infestation, CAI added.

Meanwhile, projected cotton supply for 2020-21 crop year stood at 477.50 lakh bales, which consists of the opening stock of 107.50 lakh bales at the beginning of the season, crop for the season estimated at 356 lakh bales and imports estimated at 14 lakh bales.

Domestic consumption estimated by the CAI is 330 lakh bales, while export of cotton estimated for the season is 60 lakh bales. The carry over stock estimated at the end of the season on September 30, 2021, is 87.50 lakh bales, as per CAI.

Biman Mukherji is a columnist and consulting editor at Indoasiancommodities.com. He has worked for international news organisations such as Reuters, The Wall Street Journal as well as for newspapers like The Times of India. He can be reached at biman.mukherji@indoasiancommodities.in

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