Record global cotton supply will drive use higher as recovery from the COVID-19 pandemic continues, according to the first forecast for 2021/22 by the U.S. Department of Agriculture (USDA).
The USDA said in its latest World Agriculture Supply and Demand Estimate (WASDE) report that global consumption is expected to grow 3.5 percent to almost 122 million bales, higher than the pre-pandemic 2018/19 level. However, lingering pandemic related disruptions (i.e. reduced consumer demand and logistical issues) are expected to keep global use below the 2017/18 record level.
“All top ten consuming countries are expected to witness growth. India is up 2.0 million bales, accounting for nearly one-half of growth in global use. Consumption growth in Pakistan, Turkey, and Bangladesh is expected at or above the long-term world growth rate of around 2 percent. Consumption in Vietnam is also forecast to increase,” the report said.
Global ending stocks are forecast lower on smaller beginning stocks and consumption exceeding production for the second consecutive year, it said, adding that stocks in China and India are both expected to decline by more than 1.5 million bales.
China’s share of global stocks will decline to the second lowest level in 11 years. India’s consumption growth will exceed the expected increase in production, and lower stocks to their lowest level in 3 years. Stocks in the United States are also expected to decline. Brazil stocks are expected to increase due to the arrival of the second-largest projected crop at the end of the marketing year.
World trade is expected to contract slightly in 2021/22 from 2020/21, the highest in 8 years. Shipments from the United States and Brazil are projected down on lower exportable supplies due to significantly lower carryin.
Australia’s exports are forecast to more than double on dramatically higher production, with improved prospects relative to the extreme drought in 2020/21. India’s exports are up as higher world prices allow for the reduction of government-controlled stocks.
The second-highest projected global imports in 9 years will be driven by higher global consumption relative to the previous year. China is projected to be the world’s largest importer for the second consecutive year, although imports are forecast lower than the previous year’s 8-year high. This follows the State Reserve’s expected return to replenishing stocks with foreign and domestic supplies.
Pakistan imports are down slightly from the previous year’s record but significant due to the highest expected consumption level in 3 years and lower carryin.