Global cotton productions look promising as the 2023/24 season kicks from August 1, according to the press release of the International Cotton Advisory Committee. Its initial projections predict a rosy picture much better than last year in global production, consumption and trade.
However the ICAC cautioned that there are some dark clouds on the horizon which might pollute the early optimism. The secretariat pointed out various reasons for these concerns. It points out that China, India and the United States that are the top three cotton producers would most likely miss their production targets. Pakistan and Brazil the next major producers could also struggle (Pakistan impacted by climate change).
On the economic front, global inflation has moderated significantly thanks to governments’ efforts, but the consumer confidence remains low and that could drag down demand for discretionary goods. Lower demand means lower mill use, which means a decrease in trade.
The Secretariat’s current price forecast of the season-average A index for 2023/24 depicts the uncertainty as projects the index could range from 66 cents to 109 cents, with a midpoint of 85 cents per pound.
Despite good news on cotton production much depends on production in China, India and the USA
