Global cotton production in 2022-23 is projected to be down by 300,000 bales to 115.4 million, mainly due to lower yields in India, according to the ‘Cotton: World Markets and Trade’ report by the US Department of Agriculture (USDA).
Moreover, consumption of cotton is forecast to decrease globally, attributed to lower use in India, Indonesia, and Vietnam.
US’ 2022-23 exports are lowered by 250,000 bales compared with the previous month to 12 million bales.
This is despite higher US production and is attributed to lower global demand, with global consumption forecast down more than 800,000 bales compared with the previous month to 110.9 million.
The report also stated that the major consumers including India, China, and Pakistan are facing challenges including a downward trend in profit margins and yarn orders, which in turn have resulted in conservative buying practices for cotton lint.
Moreover, a lower global consumption forecast reflects the slowing of overall global demand for cotton products, as per USDA’s report.
China still remains the largest destination for US cotton exports, but outstanding sales are significantly lower compared with the previous year. Despite Pakistan holding the largest portion of US outstanding sales, issues with financing are slowing shipments and new sales.
Lower projected US exports are expected to increase US ending stocks to 4.2 million bales, 700,000 bales higher compared with last month and symbolic of lower global consumption prospects.