US cotton exports are “going to explode”, and beat official forecasts, Louis Dreyfus cotton boss Joe Nicosia said, viewing a slow start to the season as down to a lagging harvest rather than a dearth of demand.
Mr Nicosia, chief executive of Dreyfus’s Allenberg Cotton business, said that a dearth of supplies left over from last season was in part behind the slow start to 2021-22 for US cotton exports, which official data show at 1.64m tonnes as of the end of last month, down some 30% year on year.
“Looked at electronics warehouse receipts [EWRs]in the US for September 1, there are 1.36m bales, extremely tight, and essentially zero, 3m bales less than a year before,” he said.
“Literally in my 40 years in the cotton business, I have never seen where we were in the US where we did not have a bale to sell, not one.
“It was impossible for us to make an additional sale because the stocks were completely down to zero.”
‘Very slow to arrive’
The support shortfall was being exacerbated by a sluggish onset of supplies from the ongoing US harvest, which US Department of Agriculture data show at 13% complete as of last Sunday, 6 points behind the average pace.
“Our new crop supplies have been very slow to arrive,” he told the International Cotton Association conference in Liverpool.
“We had only 275,000 bales that were ginned as of September 15, which is one of the lowest numbers we have seen… over the last 30 years.”
So – thanks to low carry-in stocks, and a harvest that has been slow to begin” – US exports have been “off to a very slow start because we just do not have the bales”.
A year ago, “the US 3m more bales of carry-in stocks that were available to shipped in the September, October, November timeframe that the US does not have now”.
‘Getting ready to explode’
However, US exports were poised for rapid acceleration as supplies come in from a harvest pegged by the USDA at 18.5m bales – 3.9m bales larger than the 2020 crop.
With supplies from rival southern hemisphere exporters not set to hit the market for a further six-to-nine months, but world market demand “even greater than it was last year… US shipments I think are getting ready to explode.
“We may have started slow on exports, but we are going to finish fast.
“When this crop comes in, I truly believe December, January, February March we are going to have record shipments out of the US.”
Upgrades ahead?
He forecast exports in 2021-22 ending up at 16.0m-16.4m bales, in line with last season’s 16.37m-bale number.
While that would exceed the USDA’s current forecast of 15.5m bales, officials have a history of upgrading their export estimates as the season proceeds.
“When we look historically, we see that the USDA, apart from the Covid year, has always underestimated exports out of the US.
“It would not surprise me to see… 2021-22 export [forecasts] continue to grow, like much of the past years have done as well.”
Πηγή: agrimoney.com