Highlights from the December 2021 Cotton This Month include:
- The international reference price of cotton has risen dramatically during the 2020/21 season and continues its rise into the 2021/22 season
- Cotton prices are the highest they’ve been in a decade
- However, the Secretariat does not expect cotton prices to rise much higher than they are now and it is highly unlikely that prices will reach the levels seen during the 2010/11 season.T
Cotton Prices Expected to Remain at Elevated Levels throughout 2021/22
The coming season looks like a promising one for cotton farmers, with high prices expected to continue through the 2021/22 season. That’s obviously a good thing but prices are a double-edged sword. Higher income for farmers is a good thing and it could drive them to increase the global acreage under cotton but those costs are usually passed along the supply chain, which makes cotton less competitive against other fibres.
Prices are expected to be volatile through the remainder of the 2021/22 season but it is unlikely they will climb much higher than the current point. The ICAC Secretariat does not expect prices or volatility to reach those of the infamous 2010/11 season, when prices ascended all the way to 243.65 cents per pound.
While mill use is expected to remain robust throughout 2021/22, global stocks are believed to be sufficient to meet the demand. At the end of the 2020/21 season, global stocks are estimated at 20.35 million tonnes.
The Secretariat’s current price forecast of the season-average A index for 2021/22 ranges from 91 cents to 119 cents, with a midpoint at 103.29 cents per pound.
Cotton This Month is published at the beginning of the month with the Cotton Update published mid-month. The Cotton Update, which is included in the Cotton This Month subscription, is a mid-month report with updated information on supply/demand estimates and prices. The next Cotton Update will be released on December 15, 2021. The next Cotton This Month will be released on 1 February 2021.
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