According to the International Cotton Advisory Committee (ICAC), world cotton stocks in 2019/2020 could reach a level not seen in five years. This is the result of a decline in demand due to the coronavirus pandemic and an increase in production. Stocks are estimated at 21.75 million tonnes at the end of the season, while world consumption is expected to fall by 11.3% to 23 million tonnes.
China and India, which account for 52% of total consumption, will experience a 12% drop in demand. Other countries that may also see a decline include Bangladesh (-25%), Brazil (-11%), Vietnam (-8%) and Pakistan (-7%).
On the other hand, production is expected to increase slightly by 2 per cent to 26.2 million tons. This increase in stocks would reinforce the downward trend in prices, which does not bode well for exporting countries, particularly those in Africa.
It should be recalled that cotton cultivation occupies 30 to 36 million hectares of land worldwide. It employs more than 26 million producers, 85% of whom are located in India, Pakistan, China and Uzbekistan.
Source: Ecofin Agency