Page 8 - TEXtalks International April/May 2022

09

Global Cotton Update

and Pakistan's Scenario

40 percent rise in prices in one year.

Supply disruptions due to transportation

and logistics challenges

Last year, the world witnessed a global cotton cents to $1 a pound, showing a 40 percent rise in
shortage due to COVID and other factors. However, one year. The National Cotton Council of America
the season 2021/22 is looking promising for cotton recently predicted that US growers would plant 12
production. As per the International Cotton Advisory million acres of cotton this year, a 7 percent increase
Committee (ICAC) report, the cotton industry posted over last year's plantings. If there is not a massive
gains in the most significant categories vs. the drought in west Texas, where 25 percent of the US
previous season, concerning the area, production, cotton crop comes from, that could lead to lower
and consumption, showing an increasing trend prices.
compared to 2020/21. One of the few exceptions is
world trade, which suffered from the many disrup- In Pakistan, the cotton prices are going up as in its
tions experienced throughout the supply chain due neighbor India. It is expected that the cotton crop will
to transportation and logistics challenges. The be affected in Pakistan due to the rise in temperature
Secretariat's current price forecast of the season-av- and scarcity of water. The unprecedented fluctuation
erage A index for 2021/22 ranges from 109 cents to was observed in the rate of New York Cotton. The
129 cents, with a midpoint at 115 cents per pound. New York cotton rate reached the highest level of
155.95 per pound. There are rumors that India may
In other words, demand has remained high all year put a partial ban on the export of cotton. The local
— the problem was getting the fiber from one sector spinners should be cautious while importing cotton
of the supply chain to the next and ultimately onto during the following season. North India's cotton yarn
store shelves and into consumers' hands. While market continues to record gradual price increases
strong US export numbers are an encouraging sign as mills pass on cotton price rise, even though
that the problems are receding, the backlogs will demand is slowing down as downstream industry is
take time to clear through the intricate shipping and not finding it comfortable with increasing yarn prices.
transport system and could take many months to In India, average prices hovered near Rs 8,220 per
normalize fully. After declining by 22%, the cotton quintal compared to Rs 5,728 per quintal last year,
area in West African countries increased by 44% in marking an increment of 45 percent on a
2021/22. The area recovery in Mali drove this impres- year-on-year basis. Fashion retailers such as Shop-
sive recovery. The Cotlook-A index, representing a pers Stop, Celio, and Arvind Fashions plan to
world cotton price, increased to $1.41 a pound, its increase prices given the unabated rise in cotton
highest since 2011. One year ago, it was around 98 prices, worrying the industry for more than a year.

April/May 2022 April/May 2022