Executive Summary

Highlights from the September 2020 Cotton This Month include:

• Global recovery will be inconsistent due to countries’ varying abilities to deal with the pandemic
• Worldwide production is expected to decline to 25.1 million tonnes in 2020/21
• Global consumption is expected to increase to 24.3 million tonnes in 2020/21
• With rising stocks and continuing economic uncertainty, prices will remain under pressure for the near future

 
With Stocks Rising and Production Outpacing Consumption, Recovery May Be Limited
Although countries around the entire world were plunged into the pandemic almost simultaneously, they will recover at different speeds, based on their ability to contain the virus and restart their economies. The recovery will also be hampered by rising stocks, which will swell even further given that global production (25.1 million tonnes) is expected to outpace consumption, even though it is projected to increase by 7.2% to 24.3 million tonnes, in 2020/21.

There are some positive signs to feel optimistic about — spinning mills in Vietnam, Bangladesh and India were up to 75% capacity in July, for example — but at the current stocks-to-use ratio of 0.97, there’s currently enough cotton in the world’s warehouses right now to meet consumption needs for nearly a full year.



The Secretariat’s current projection for the year-end 2020/21 average of the A Index has been revised to 67 cents per pound this month.


Cotton This Month is published at the beginning of the month with the Cotton Update published mid-month. The Cotton Update, which is included in the Cotton This Month subscription, is a mid-month report with updated information on supply/demand estimates and prices. The next Cotton Update will be released on 15 September 2020. The next Cotton This Month will be released on 1 October 2020.

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Please contact the author, Ms. Lihan Wei, with questions on this report.

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About the International Cotton Advisory Committee (ICAC)
Formed in 1939, the ICAC is an association of cotton producing, consuming and trading countries. It acts as a catalyst for change by helping member countries maintain a healthy world cotton economy; provides transparency to the world cotton market by serving as a clearinghouse for technical information on cotton production; and serves as a forum for discussing cotton issues of international significance. The ICAC does not have a role in setting market prices or in intervening in market mechanisms. For more information, please visit www.icac.org.