Raw Materials

2023-04-06

Indian farmers might be delaying cotton deliveries but global production is stable

Over the last few months, we have been paying close attention to the cotton sector in India, which has the largest planted area and second-highest lint production in the world. The Secretariat is currently projecting India's crop to be 5.2 million tonnes, after revising it downward by 391,000 tonnes in December and 257,000 more in February.

Executive Summary

The April 2023 edition of Cotton This Month:

Assesses the delayed cotton arrivals in India and how it will affect global balance sheets

Explains why production estimates for India have been revised downward twice already

Estimates that global production will be remain stable at 24.55 million tonnes

The arrival numbers have been unusually low, possibly because farmers — who so recently enjoyed near-record-high prices — are holding onto their cotton in the hope that prices, which have dropped recently, start to trend upward again. The pace of arrivals did pick up in March, however, and prices have stabilised slightly over the past few weeks so farmers may be starting to realise that accumulated debt will start to outpace any additional income they might gain by holding their cotton.

Currently, the Secretariat projects global consumption at 24.55 million tonnes and consumption at 23.8 million tonnes.

Price Projections

The Secretariat’s current price forecast of the season-average A index for 2022/23 ranges from 99.8 cents to 122.12 cents, with a midpoint of 103.71 cents per pound.

Cotton This Month is published at the beginning of the month with the Cotton Update published mid-month. The Cotton Update is a mid-month report with updated information on supply/demand estimates and prices. The next Cotton Update will be released on 17 April 2023. The next Cotton This Month will be released on 1 May 2023.