2020 Annus Horribilis ? 

Will the year 2021 really be any better? 

It's difficult to say, especially when the signals from the end of the year are so contradictory. 

Despite the electoral process coming to an end in the US, things are still not clear. Jo Biden's victory is absolutely certain according to many analysts, but rarely have elections generated so much uncertainty: 

• What will be the final outcome of President Trump’s legal claims? 
• What alternatives are really open to President-elect Biden when nearly 74 million Americans voted for his opponent, especially regarding economic matters? Democrats will be desperate to gain control of the senate and the Georgia runoff elections in January will be crucial for both parties. 
• What will the US attitude be towards their international allies and especially China? 
• Will the decisions taken by the Republicans during their final days in power have a lasting economic impact? 
• Are we entering a new era of competitive devaluation? Given the sudden fall of the dollar, and following the fall of the Chinese yuan in recent days, it is perhaps a legitimate fear. 
• If the "Sino-American Trade War" continues, where will Europe, South America and Africa stand? What place will the new Pacific Free Trade Agreement (PFTA) have? 
• ….

The election results are giving rise to a growing number of questions and uncertainties for the world. 

In this context, the cotton market is also being pulled in varying directions. The rapid decline of the dollar keeps US exports strong by making US cotton more competitive. There is no reason to fear selling pressure in the coming months. 

China continues to import both cotton and grains, which raises questions about the basis for this buying power. Is there a real need for these goods, a desire to influence the level of trade, or are they simply following the terms of the phase one trade deal signed with the Trump Administration? 

India, for its part, has published production figures of less than 36 million bales, while its consumption is estimated at around 33 million bales. The current policy of Minimum Guaranteed Prices (MSP) to farmers should continue to bear fruit and avoid putting pressure on prices. 

Brazil is experiencing a severe drought which, by delaying sowing, could reduce the amount of land devoted to cotton, especially soybeans. 

This week's WASDE report is expected to confirm the above while reducing consumption. Indeed, the second wave of COVID19 continues to spread globally, and despite the announcements of several vaccines, some countries are preparing for a third wave in the second quarter of 2021.