World Markets and Trade – AgFax

U.S. 2022/23 exports are lowered 250,000 bales compared with the previous month to 12.0 million bales. This is despite higher U.S. 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.

Major consumers including China, India, 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. Additionally, a lower global consumption forecast reflects the slowing of overall global demand for cotton products.

China still remains the largest destination for U.S. cotton exports, but outstanding sales are significantly lower compared with the previous year. Despite Pakistan holding the largest portion of U.S. outstanding sales, issues with financing are slowing shipments and new sales.

Lower projected U.S. exports are expected to increase U.S. ending stocks to 4.2 million bales, 700,000 bales higher compared with last month and symbolic of lower global consumption prospects.

2022/23 Outlook

Global production is projected down 300,000 bales to 115.4 million and largely attributed to lower yields in India. Consumption is forecast down due to lower use in India, Indonesia, and Vietnam. This is the eighth consecutive monthly decline for global consumption with the current projected level at the second lowest level in 9 years. Global trade is down 600,000 bales, led by declines in China and Indonesia imports. The U.S. balance sheet shows higher production and ending stocks relative to the previous month. Exports are forecast down this month and the projected U.S. season-average farm price is lowered 2 cents to 83 cents per pound. For current prices received by farmers click here: NASS farm price.

Global Cotton Prices

Global cotton prices were mostly unchanged since last month’s WASDE. Slightly higher prices on the Intercontinental Exchange (ICE) supported U.S. spot prices despite relatively low foreign sales. For the last eight USDA reports, the total sum of net sales has not exceeded 120,000 bales and is well below normal seasonal levels. India origin was the only spot price to witness a monthly decline despite plummeting arrivals of seed cotton. According to the India Ministry of Agriculture, arrivals are roughly 40 percent lower compared with the previous year.

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