Highlights from the December 2021 Cotton This Month include:
- The international reference price of cotton has risen dramatically during the 2020/21 season and continues its rise into the 2021/22 season
- Cotton prices are the highest they've been in a decade
- However, the Secretariat does not expect cotton prices to rise much higher than they are now and it is highly unlikely that prices will reach the levels seen during the 2010/11 season
Cotton Prices Expected to Remain at Elevated Levels throughout 2021/22
The coming season looks like a promising one for cotton farmers, with high prices expected to continue through the 2021/22 season. That's obviously a good thing but prices are a double-edged sword. Higher income for farmers is a good thing and it could drive them to increase the global acreage under cotton but those costs are usually passed along the supply chain, which makes cotton less competitive against other fibres.
Prices are expected to be volatile through the remainder of the 2021/22 season but it is unlikely they will climb much higher than the current the current point. The ICAC Secretariat does not expect prices or volatility to reach those of the infamous 2020/11 season, when prices ascended all the way to 243.65 cents per pound.
While mill use is expected to remain robust throughout 2021/22, global stocks are believed to be sufficient to meet the demand. At the end of the 2020/21 season, global stocks are estimated at 20.35 million tonnes.
The Secretariat’s current price forecast of the season-average A index for 2021/22 ranges from 91 cents to 119 cents, with a midpoint at 103.29 cents per pound.