US Global Markets: Cotton – How Bad Has COVID Affected the Global Sector?

Published 2020년 12월 11일

Tridge summary

The cotton industry has been significantly impacted by COVID-19, as indicated by a comparison of the USDA's forecasts for the 2019/20 and 2020/21 seasons. Initially, the 2020/21 world use forecast was projected to increase by 1.7 percent from the previous year, but it was later reduced due to the pandemic's impacts. Despite these reductions, use has recently seen slight increases as economic recovery occurs. The pandemic has not notably affected cotton lint production and has had minimal impact on plantings, except in West Africa. As a result, ending stocks are anticipated to rise by 19 percent from the February Outlook. Prices, which had dipped to a 10-year low during the pandemic, have since recovered and surpassed pre-pandemic levels. The price trends during the pandemic resemble those of the 2007/08 Global Financial Crisis and the 2010 cotton price shock, and it is expected that the cotton sector will take several years to fully recover.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

COVID-19 has dramatically impacted nearly every sector of the global economy, and the cotton sector is no exception. Comparing the February 2020 USDA forecasts for 2019/20 and 2020/21 (presented at the USDA Outlook Forum) with this month’s forecasts provides an overview of the impact. The February 2020 USDA forecast for world use in 2020/21 was 121 million bales, up 1.7 percent from the 2019/20 forecast that same month. As the extent of the COVID-19 impacts became clearer, the 2020/21 world use forecast was slashed. However, as components of the world economy have recovered, use has edged up in recent months and is now only 3 percent below February. The forecast for World use in 2019/20 fell 14 percent between the February and December forecasts as spinning mills dramatically reduced operations. While the onset of COVID-19 impacts varied by country, forecast 2019/20 mill use was reduced in all major spinning countries. Monthly use fell by around 90 percent in the United States, ...

Source: Agfax