Washington, DC (USA), September 1, 2023
With the first month of the new season behind us, we are starting to get a clearer picture of how production, consumption, and trade will unfold, and there are serious storm clouds on the horizon — or, in this case, no clouds at all.
A lack of precipitation is setting off alarm bells among some of the world’s top cotton producers, with China, the United States, India, and Pakistan all suffering from some degree of drought. The USA has already reduced its projections for the 2023/24 season by 55000 tonnes, and more cuts could be coming.
If that weren’t bad enough, major economic factors could come into play as well. Disinflation has taken hold in China, which could result in a host of negative developments, including reduced business revenues, wage deflation, and decreasing investments. From the outside looking in, it appears China is not taking aggressive action to stop deflation.
And even if China’s Central Bank takes the necessary actions, perception can sometimes be reality. If people don’t believe things are getting better, then they probably won’t, no matter what actions the government takes. When consumers start hoarding their cash and postponing purchases, demand for many products — including cotton — will suffer.
For the most up-to-date statistics, please refer to the Data Dashboard. It is updated with new data constantly and that new information is immediately reflected in the Dashboard, making it a valuable, up-to-date resource all month long. You can view a video tutorial on how to use the ICAC Data Dashboard on the ICAC’s YouTube page Here.
Please note that the cotton balance sheets have been moved to the ICAC Data Dashboard. This ensures that the season balance sheets are always up-to-date and available whenever you need them. This also helps to reduce errors because the data is compiled directly from our database. We have included them in this PDF report, but we strongly encourage you to obtain all data from the Dashboard.
Price Projections
The Secretariat’s current price forecast of the season-average A index for 2023/24 ranges from 67 cents to 106 cents, with a midpoint of 84 cents per pound.
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Please contact the author, ICAC Data Scientist Matthew Looney, with questions on this report.
The next Cotton This Month will be released on 2 October 2023.
About the International Cotton Advisory Committee (ICAC)
Formed in 1939, the ICAC is an association of cotton producing, consuming and trading countries. It acts as a catalyst for change by helping member countries maintain a healthy world cotton economy; provides transparency to the world cotton market by serving as a clearinghouse for technical information on cotton production; and serves as a forum for discussing cotton issues of international significance. In addition, members can take advantage of the ICAC’s global network of cotton researchers, whose expertise covers the supply chain from farm to textile manufacturing, and have free access to its cutting-edge technologies like the voice-based app and virtual technology cotton training programme. Committed to ensuring cotton’s continued sustainability, the ICAC is the only intergovernmental commodity body covering cotton that is recognised by the United Nations. For more information, please visit www.icac.org, Twitter or LinkedIn.
