Executive Summary
Highlights from the February 2022 Cotton This Month include:
- There were two significant 2021/22 season projections relating to the global cotton industry, in March and June
- While not perfect, the Secretariat was accurate in forecasting the direction of both global cotton production and international reference price of cotton (Cotlook A-Index)
- The forecast of the season-average A index for 2021/22 ranges from 94 cents to 117 cents, with a midpoint at 104 cents per pound
How Did the ICAC Do on Projections in 2021? The Secretariat Reports on Its Own Accuracy
As the last two years have shown us, the world is a huge, complex place and predicting future trends is never a sure thing. Nonetheless, that's the job for ICAC Data Scientist Matthew Looney, who has used the first Cotton This Month of 2022 to look back at how accurate the ICAC was in its projections in 2021.
The ICAC Secretariat provided two significant outlooks last year, in March and June:
- Elevated prices would, as they historically have, drive an increase in planted area.
- Global production would increase by 5% to 25.5 million tonnes.
The season is only half over, but a few things have become clear. First, anyone who predicted there would be a 44% increase in prices, driving them to more than 130 US cents per pound, must have used a crystal ball! Second, the prediction of 25.5 million tonnes of global production came up a little short, as the current projection is 26.4 million tonnes. The higher figure is the result of increased area and production in West Africa, Brazil and the United States, with Mali in particular rebounding nicely after a disastrous 2020/21 season marred by farmer boycotts. No one is perfect but so far, the direction of the projections made in the March and June 2021 CTM editions are proving to be accurate.
The first 'Preliminary Outlook for 2022/23’ will be released in the March 2022 edition of Cotton This Month.
The Secretariat’s current price forecast of the season-average A index for 2021/22 ranges from 94 cents to 117 cents, with a midpoint at 104 cents per pound.