Global Cotton Inventory Increases In 2020 / 21

 

Data show that the increase of global cotton inventory in this market year is mainly caused by the increase of Indian supply. India's cotton inventory increased by about 20%.

 

As a result, global cotton prices in 2020 / 21 are expected to remain relatively low in the previous year.

 

***U.S. cotton production forecast for 2020 has been lowered***

 

According to the US Department of agriculture's September supply and demand report, the U.S. cotton production this year is expected to be 17.1 million bales, 1 million bales lower than the estimated value reported in August, and 2.8 million bales lower than the level in 2019.

 

Analysts said the USDA's cut in the September report's production forecast was due to a reduction in the area sown in the United States and a decline in overall U.S. cotton yields. If the September report's forecast turns out to be true, U.S. cotton production this year is expected to be the lowest since 2015, with 12.9 million bales.

 

The U.S. cotton acreage forecast was slightly revised, based on data provided by the U.S. Department of agriculture's FSA.

 

The report estimates that the United States will plant 12.1 million acres of cotton this year, while the harvest area is expected to be 9 million acres, down 2.5% from August's estimate. This has resulted in the US "abandoning" cotton to close to 25.5% this year, compared with about 15.5% in 2019.

 

The report also expects U.S. cotton yield to be 910 pounds per acre this market year, slightly higher than the 2017 level.

 

According to the report, the U.S. upland cotton production in 2020 is expected to be 16.5 million bales, 14% lower than that of the previous year or 2.7 million bales. In 11 of the past 20 years, the U.S. Department of Agriculture reported in September that the estimated value of upland cotton output in the United States was higher than the final estimate, and the other nine reports were lower than the final estimate. At this point, there is a two-thirds chance that the United States will produce 15-17.6 million bales of cotton this year.

 

The report shows that in all cotton growing areas of the United States, cotton output will decline this year. In Southwest China, the yield of upland cotton is expected to be 7.1 million bales, 2% lower than the previous year and 1 million bales lower than the five-year average. On the one hand, the decrease in planting area, on the other hand, is due to the increase of abandoned land area, which leads to the lowest cotton output in the southwest of the United States since 2015.

 

For most of the growing season of American cotton in 2020, local precipitation is relatively limited.

 

In the southwest of the United States, the area of abandoned cotton crops is expected to increase significantly from the annual level to 40% of the total sown area, higher than 25.5% of the previous year and 21% of the five-year average.

 

Most of the abandoned cotton fields come from relatively dry farmland. It is estimated that the cotton yield in the southwest of the United States in this market year is 759 pounds / acre, higher than 594 pounds / acre in the previous year.

 

In the southeastern part of the United States, the cotton production in 2020 is expected to be about 4.5 million bales, 22% lower than the previous year's level. The main reason for the decline is that the cotton planting area in the region has fallen to the lowest level in four years, while the yield per unit area of local buyer Nianhua is lower than the level in 2019, but still higher than the five-year average.

 

In the southeastern United States, the cotton harvest area is 2.3 million acres, and the yield is 921 pounds per acre.

 

In the Delta region of the United States, cotton production this year is expected to be the lowest level in three years, at 4.3 million bales, because the local cotton planting area is expected to significantly reduce by 25% compared with the level in 2019. But the local cotton crop is expected to yield 1176 pounds per acre, which means that the local yield is higher than the five-year average.

 

In the western United States, this year's upland cotton production is expected to be 560000 bales, down from 631000 bales in 2019.

 

Despite the reduction in local upland cotton acreage, the yield is expected to rise to 1358 pounds per acre, which means that the local cotton yield is close to the five-year average.

 

In addition, in terms of ultra long staple cotton (ELS) production, which is mainly planted in the western United States, is expected to produce 559000 bales this year, lower than 685500 bales in 2019, the lowest level since 2015.

 

The planting area of super long staple cotton is expected to shrink for the third consecutive year.

 

Data released by the U.S. Department of agriculture also showed that U.S. cotton production progress in September was lower than the same period last year, but still higher than the five-year average.

 

According to the data, the full boll rate of cotton crops in the United States was 47% in the week ending September 13, lower than 51% in the same period of last year and 45% of the five-year average. South Carolina has only 20% of cotton bolls, down from 67% in 2019. In Georgia of the United States, the full bell rate was 52%, lower than 67% in the same period of last year.

 

In Arizona, however, the full boll rate of cotton is 96%, higher than 84% in 2019.

 

But up to now, the excellent rate of cotton growth in the United States is still lower than the same period of last year and the five-year average. By the week of September 20, 2020, the rate of good cotton growth in the United States was 45%, compared with 45% in the previous week and 39% in the same period last year. In that week, the cotton harvest rate was 11%, 6% in the previous week, 10% in the same period last year, and 10% in five years.

 

 

***US cotton demand and inventory estimates revised for 2019 / 20***

 

The U.S. Department of agriculture's annual demand and supply forecast for September 20 was also revised.

 

According to the data released by the FSA and NASS of the US Department of agriculture, the US cotton consumption in 2019 / 20 is estimated to be 2.15 million bales, down 825000 bales compared with that in 2018 / 19.

 

The US cotton export forecast in 2019 / 20 was adjusted to 15.5 million bales, 690000 bales higher than that in 2018 / 19.

 

Meanwhile, according to the data released by FSA and NASS, the U.S. cotton inventory at the end of 2019 / 20 was 7.25 million bales, lower than 4.85 million bales in 2018 / 19.

 

***US cotton imports will pick up further***

 

Data show that the volume of cotton textile and clothing trade in the United States in the first half of this year decreased significantly year-on-year, but it is expected to improve in the second half of this year.

 

U.S. cotton imports show a seasonal pattern, usually before the peak consumption (summer, school season and Christmas period) will also increase significantly.

 

At the beginning of this year, U.S. cotton imports were roughly the same as the previous three years. Since then, the volume of textiles and clothing imports in the United States has generally declined since the spring of this year, which has led to a sharp decline in the volume of clothing and apparel imports in the United States since the spring, which has also led to a sharp decline in the volume of clothing and apparel imports from the United States.

 

The impact of the epidemic on the import of cotton products has been gradually alleviated. In fact, the US cotton imports in may have been relatively positive. But U.S. cotton imports in May were still only 40% of the five-year average. But import data for July showed that the ratio had risen to 85%.

 

Although there are differences in economic activities among different industries, the recent improvement in the import of cotton products in the United States has occurred, and it will rise further in the rest of this year.