With global economy paralysed and supply chains shattered, current projections by Cotton Advisory Committee (ICAC) show a 11.8 per cent decline in cotton consumption, reducing global trade to 8.26 million tonnes in 2019/20. The report also mentions that there is 4 per cent decrease in planted land in 2020/21 and 4 per cent decrease in production in 2020/21.
“While there is hope for a vaccine or cure, or that warmer weather in the Northern Hemisphere will minimise Covid’s impact, there can be no real economic recovery unless there is a health recovery first. Whether or not we sink into a worldwide depression — a long recession with unemployment reaching as high as 33 per cent — will be determined by the effectiveness of government policies,” said ICAC in a press release.
In 2020/21, global area is projected to decrease by 4 per cent to 33 million hectares, with India remaining the world leader despite plantings dropping to 12 million hectares. Production will decline by a comparable amount to 25 million tonnes. The Secretariat’s current price projection for the year-end 2019/20 average of the A Index has been revised to 71.4 cents per pound this month. The price projection for the year-end 2020/21 average of the A Index is 56.9 cents per pound this month.
Cotton This Month is published at the beginning of the month with the Cotton Update published mid-month. The Cotton Update, which is included in the Cotton This Month subscription, is a mid-month report with updated information on supply/demand estimates and prices. The next Cotton Update will be released on May 15, 2020. The next Cotton This Month will be released on June 1, 2020.
Formed in 1939, the ICAC is an association of cotton producing, consuming and trading countries. It acts as a catalyst for change by helping member countries maintain a healthy world cotton economy; provides transparency to the world cotton market by serving as a clearinghouse for technical information on cotton production and serves as a forum for discussing cotton issues of international significance. The ICAC does not have a role in setting market prices or in intervening in market mechanisms.