Cotton: World Markets and Trade

[Pages:30]March 2022

United States Department of Agriculture Foreign Agricultural Service

Cotton: World Markets and Trade

Billion Squared Meter Equivalents

Highest U.S. Cotton Product Imports in 11 Years Support Record Global Cotton Consumption

U.S. Cotton Product Imports by Country

25 20 15 10

5 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

China India Pakistan Vietnam Bangladesh ROW

Note: ROW (Rest of World)

The United States imports nearly all the cotton products (i.e., cotton apparel, home textiles, etc.) that U.S. consumers purchase in retail outlets. U.S. imports of cotton products in calendar year 2021 were the highest since 2010 and are expected to further support forecast record cotton consumption in marketing year 2021/22 (Aug-Jul). The United States is the largest importer of cotton products, and the country's demand is a significant factor in the quantity of cotton spun into yarn, hence a harbinger of global cotton lint consumption.

According to data from the International Trade Administration's Office of Textile and Apparels (OTEXA), 2021 imports of cotton products were $49 billion, comprised of more than 21 billion square meter equivalents (SME) and boosted by strong U.S. consumer demand for cotton apparel and home textiles (e.g., towels, bed sheets, etc.).1 U.S. consumers devoted more discretionary income to goods relative to services in 2021 amid ongoing COVID-19 limitations.

As a portion of consumers continued working from home, appetite for comfortable and soft knitted garments boosted demand for cotton apparel, and strong U.S. home purchases and improvements necessitated new home textiles. Moreover, pent-up demand from the previous year and an increase in discretionary income also boosted imports after 2020 U.S. cotton product imports fell to the lowest level in nearly 20 years.

China remained the largest cotton product supplier for the 19th consecutive year. This was despite Section 301 tariffs implemented in 2019 amid the U.S.-China trade dispute and the U.S. Customs and Border Protection's Withhold Release Order on all cotton-derived products from the Xinjiang autonomous region. This area produces more than 90 percent of China's cotton. However, imports from China have fallen from a record 8.0 billion SME in 2010 to 5.1 billion SME in 2021. Other countries have

1 OTEXA also refers to the product category as Cotton Products.

Approved by the World Agricultural Outlook Board/USDA

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Index (Base Vale of 100=2000/01)

made significant strides since that period ? imports from India, Vietnam, and Bangladesh were all records in 2021.

Annual U.S. Cotton Product Imports Mostly Follow Global Cotton Consumption Trend

Global Cotton Consumption Index

160 150 140 130 120 110 100

90 80

U.S. Cotton Product Imports Index

Note: Global Cotton Consumption values are indexed to the marketing year 2000/01 (August 2000 to July 2001) consumption level of 92.1 million bales. For example, the 136 value for 2021/22 is the ratio of 2021/22 to 2000/01. U.S. Cotton Product Imports are also indexed to 2000/01 and reflect the total squared meter equivalent of cotton product imports for the respective marketing year (Aug.-Jul.) relative to 2000/01.

Both U.S. cotton product imports and global cotton consumption trend closely. For the first 5 months of marketing year 2021/22 (Aug. ? Dec.), U.S. cotton product imports have remained robust, and December 2021 was a record for the month. Despite rising inflation concerns for consumers, strong U.S. disposable income and recently strong imports are expected to further support record 2021/22 global cotton consumption.

2021/22 Outlook

Global production is lowered 300,000 bales from last month due to a smaller crop in India. Use is up slightly, just over 100,000 bales, and ending stocks are down significantly for the third consecutive month with a decrease of over 1.7 million bales. Global trade is down slightly with lower exports from Malaysia, Brazil, and India.

U.S. production is unchanged at 17.6 million bales. Exports and ending stocks are also unchanged at 14.8 and 3.5 million bales, respectively, and the U.S. season-average farm price is unchanged at 90 cents per pound.

For current prices received by farmers click here: NASS farm price.

Foreign Agricultural Service/USDA

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Global Market Analysis

March 2022

cents per pound

A-Index

Weekly Cotton Prices

U.S.

China

India

Brazil

160 140 120 100

80 60 40

Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22

Notes: A-Index is the average of the five cheapest quotations (quality being Middling 11/8) for Cost and Freight (CFR) at a Far Eastern Port (more information here); U.S. is the simple average of spot quotations reported by the Agricultural Marketing Service (more information here); China is the reported China Cotton Price Index (i.e. CCIndex 3128B) and reflects the national weighted average of cotton (3128B grade) delivered to more than 200 enterprises in China; India is the Shankar-6 (grade 29-3.8-76) spot price reported here; Brazil is the delivered price in S?o Paulo city (grade strict low middling).

7-Feb 7-Mar Change

Changes Since Feb. WASDE (cents per pound)

A-Index

U.S.

China

India

Brazil

140.8

121.6

162.2

132.8

134.2

133.2

114.8

162.8

127.0

137.6

-7.6

-6.8

0.6

-5.8

3.4

Global cotton prices fell since last month's WASDE, with the A-Index dropping roughly 8 cents per pound to 133 cents but still 40 cents above the same period last year. Global macroeconomic concerns outweighed strong U.S. export sales and shipments, as greater uncertainty lowered prices on the Intercontinental Exchange. In addition, lower prices reflect a change in the spot contract month from March to May, which displayed a negative carry of roughly 2.5 cents in the middle of February. Contrary to prices in the United States and India, spot prices in China and Brazil were slightly higher amid China's return from Lunar New Year and a higher Brazilian real. The A-Index is roughly 30 cents lower than domestic prices in China compared with 20 cents last year, owing partly to a stronger yuan relative to the U.S. dollar.

Foreign Agricultural Service/USDA

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Global Market Analysis

March 2022

Million Bales

U.S. 2021/22 Shipments & Outstanding Sales (Week Ending 2/24/2022) 5 4 3 2 1 0

Exported Outstanding Sales

Source: USDA Export Sales; Note: ROW (Rest of World)

2021/22 Trade Outlook (1,000 480-lb Bales)

Major Importers:

Previous Current Change

Reason

WORLD

46,441 46,277

-164

Pakistan Turkey

5,500 5,200

5,300 5,300

-200 100

Lower-than-expected imports for the first half of the marketing year.

Stronger-than-expected imports

Malaysia

700

600

-100

Reflecting data from the Malaysia Department of Statistics

Major Exporters:

Previous

WORLD

46,445

Malaysia

450

Brazil India Australia Greece Zimbabwe

8,200 5,700 4,300 1,250 200

Current

46,268 200

8,000 5,500 4,400 1,350 300

Change

-177 -250

-200 -200 100 100 100

Reason

Reflecting data from the Malaysia Department of Statistics Lower-than-expected shipments during a seasonally strong period of the year Lower-than-expected exportable supplies

Strong pace to date

Strong pace to date Adjustment to back-year trade boosts exportable supplies

Foreign Agricultural Service/USDA

4

Global Market Analysis

March 2022

The Foreign Agricultural Service (FAS) updates its production, supply, and distribution (PSD) database for cotton, oilseeds, and grains at 12:00 p.m. on the day the World Agricultural Supply and Demand Estimates (WASDE) report is released. This circular is released by 12:15 p.m.

Questions may be directed to:

Graham Soley

(202) 772-4235

Rishan Chaudhry (202) 279-0478

(Graham.Soley@) (Rishan.Chaudhry@)

FAGSraRheapmorStos laenyd Databa(2se0s2:) 772-4235

(Graham.Soley@)

Current World Market and Trade and World Agricultural Production Reports:



Archives World Market and Trade and World Agricultural Production Reports:



Production, Supply and Distribution Database (PSD Online):



Global Agricultural Trade System (U.S. Exports and Imports):



Export Sales Report:



Global Agricultural Information Network (Agricultural Attach? Reports):



Other USDA Reports:

World Agricultural Supply and Demand Estimates (WASDE):



Economic Research Service:



National Agricultural Statistics Service:



Foreign Agricultural Service/USDA

5

Global Market Analysis

March 2022

Country Mktg Year

Argentina 2020/21 2021/22

Australia 2021/22

Azerbaijan 2021/22

Brazil 2021/22

Burkina Faso 2021/22

Cote d'Ivoire 2021/22

France 2021/22

Greece 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22

Hong Kong 2021/22

India 2019/20 2020/21 2021/22

Italy 2021/22

Foreign Agricultural Service/USDA Global Market Analysis

Summary of Changes in estimates and Forecasts from Last Month (1,000 480 lb Bales and 1,000 Ha)

Area Harvested

Beginning Stocks

Production

Imports

Exports

Use

Loss

Total Dom. Cons.

Ending Stocks

-25

0

0

30

0

50

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

25

0

0

50

0

0

65

0

0

90

0

0

115

0

0

125

0

0

135

0

0

140

0

0

140

0

0

0

0

0

0

0

-500

0

-1,500

0 0 -500

0

0

0

6

0

0

0

0

0

0

0

50

0

0

0

0

0

100

0

0

0

-100

0

25

0

0

0

-25

0

-200

0

0

0

200

0

25

0

0

0

-25

0

25

0

0

0

-25

2

2

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

100

0

-25

-25

25

0

-25

-25

50

0

-15

-15

65

0

-25

-25

90

0

-25

-25

115

0

-10

-10

125

0

-10

-10

135

0

-5

-5

140

0

0

0

140

0

0

0

40

13

13

0

0

0

0

0

0

500

0

0

1,000

0

-200

0

0

500

-500

0

1,000

-1,500

0

0

-1,800

5

3

0

0

0

2

March 2022

Country Mktg Year

Malaysia 2019/20 2020/21 2021/22

Mexico 2021/22

Netherlands 2021/22

Pakistan 2021/22

Portugal 2021/22

Russia 2021/22

Spain 2021/22

Tajikistan 2021/22

Thailand 2021/22

Turkey 2021/22

Ukraine 2021/22

Uzbekistan 2021/22

Zimbabwe 2020/21 2021/22

World

World

Foreign Agricultural Service/USDA Global Market Analysis

Summary of Changes in estimates and Forecasts from Last Month (Continued) (1,000 480 lb Bales and 1,000 Ha)

Area Harvested

Beginning Stocks

Production

Imports

Exports

Use

Loss

Total Dom. Cons.

Ending Stocks

0

0

0

-146

-80

0

0

-66

0

-71

-45

0

0

-92

0

-100

-250

0

5

0

150

0

0

100

0

0

0

4

0

4

0

0

0

-200

0

0

0

0

0

-10

0

-10

0

0

0

-25

0

-20

0

0

0

0

10

-5

0

0

0

0

10

0

0

0

0

50

0

45

0

0

0

100

0

0

0

0

0

-3

0

-3

0

0

0

0

10

0

0

0

0

0

-115

0

0

115

0

0

100

0

0

0

-66

0

0

-92

0

0

58

0

100

50

0

4

0

0

0

-200

0

-10

0

0

-20

-5

0

-5

-5

0

0

-10

0

45

5

0

0

100

0

-3

0

0

0

-10

0

0

115

0

0

15

7

March 2022

Country Mktg Year

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22

Summary of Changes in estimates and Forecasts from Last Month (Continued) (1,000 480 lb Bales and 1,000 Ha)

Area Harvested

Beginning Stocks

Production

Imports

Exports

0

0

0

25

0

50

0

65

0

90

0

115

0

125

0

135

-25

-426

35

-1,337

0 0 0 0 0 0 0 0 0 -300

0 0 0 0 0 0 0 -146 -71 -164

0 0 0 0 0 0 0 -80 -160 -177

Use

0 0 0 0 0 0 0 500 1,000 111

Loss

Total Dom. Cons.

Ending Stocks

-25

-25

25

-25

-25

50

-15

-15

65

-25

-25

90

-25

-25

115

-10

-10

125

-10

-10

135

-5

495

-426

0

1,000

-1,337

0

111

-1,735

Foreign Agricultural Service/USDA

8

Global Market Analysis

March 2022

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