International Cotton Advisory Committee (ICAC) highlights from the February 2022 Cotton This Month forecasts that season-average A index for 2021/22 ranges from 94 cents to 117 cents, with a midpoint at 104 cents per pound. The Secretariat has discussed its own accuracy for projections relating to the global cotton industry in this issue.
While not perfect, the Secretariat was accurate in forecasting the direction of both global cotton production and international reference price of cotton (Cotlook A-Index). The ICAC Secretariat provided two significant outlooks last year, in March and June 2021:
• Elevated prices would, as they historically have, drive an increase in planted areas
• Global production would increase by 5% to 25.5 million tonnes
The season is only half over, but a few things have become clear. First, anyone who predicted there would be a 44% increase in prices, driving them to more than 130 US cents per pound, must have used a crystal ball! Second, the prediction of 25.5 million tonnes of global production came up a little short, as the current projection is 26.4 million tonnes. The higher figure results from increased area and production in West Africa, Brazil, and the United States, with Mali, in particular, rebounding nicely after a disastrous 2020/21 season marred by farmer boycotts. No one is perfect, but the direction of the projections made in the March and June 2021 CTM editions is proving to be accurate.
Pakistan is one of the biggest importers of the USA cotton could get affected significantly. Price of Punjab’s Phutti attracted per 40 kilograms prices from Rs 7000 to Rs 8600.
Cotton of Sindh was traded from Rs 15500 to Rs 20,000 per maund, Punjab’s cotton was traded from Rs 16500 to Rs 20,000 per maund. Pakistan’s textile exports are rapidly growing, up 26% in the first half of the current fiscal year, accounting for 62% of total exports. A government scheme to import cotton for domestic distribution, even without any subsidies, to meet the industry’s needs would still lead to gains for the national economy and exports because of value addition.
This gains increased importance because it would also help offset the higher prices of imported cotton, which would generally eat into the profit margins of textile producers. It would help ensure that the export growth can continue with little impact on profitability for textile producers.
