Executive Summary
Highlights from the May 2022 Cotton This Month include:
- With 2021/22 winding down, it appears area, production and consumption will all be up year-over-year
- While many countries made gains, West Africa showed an incredible turnaround, led my Mali
- Global trade was down, largely due to the troubles experienced with global transportation and logistics
As the 2021/22 Season Comes to a Close, Area, Production and Consumption Are All Up vs 2020/21
As the 2021/22 season comes to an end in about 13 weeks, the industry posted gains in most major categories vs the previous season, with area, production and consumption all increasing vs 2020/21. One of the few exceptions is world trade, which suffered from the many disruptions experienced throughout the supply chain due to transportation and logistics challenges.
In other words, demand has remained high all year — the problem was actually getting the fibre from one sector of the supply chain to the next, and ultimately onto store shelves and into consumers' hands. While strong US export numbers are an encouraging sign that the problems are receding, the backlogs will take time to clear through the intricate shipping and transport system and could take many months to fully normalise.
After declining by 22%, cotton area in West African countries increased by 44% in 2021/22. This impressive recovery was driven by the recovery of area in Mali (see the February 2022 edition of CTM for the explanation).
The Secretariat’s current price forecast of the season-average A index for 2021/22 ranges from 109 cents to 129 cents, with a midpoint at 115 cents per pound.
