Cotton Prices Jump After U.S. Cut Exports Twofold
Tags: USA, Indexbox, Cotton, Export

Cotton Prices Jump After U.S. Cut Exports Twofold — IndexBox

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IndexBox has just published a new report: ‘U.S. — Cotton Lint — Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In October 2021, the global cotton price jumped by +13% to $2.59 per kg, according to World Bank’s data. Global supply shows a sign of reduction, as American cotton exports dropped twofold from September to October. Droughts have wiped out a significant part of cotton crops across the U.S., reducing yield, especially in Texas. The U.S. remains the world’s leading supplier, accounting for 41% of global cotton lint exports. China, Viet Nam, and Pakistan represent the critical importers of cotton lint from America.

Global Cotton Price Trend

According to World Bank’s data, from September 2021 to October 2021, the global price for the cotton A Index jumped from $2.29 per kg to $2.59 per kg. The reducing cotton yields in the U.S. due to unfavourable weather forced American suppliers to slump exports, decreasing global market supply. The U.S. represents the leading supplier, accounting for 41% of global cotton lint exports.

Since the beginning of this year, the global price increased from $1.92 per kg in January to $2.59 per kg in October. In 2020, the global average cotton price estimated at $1.59 per kg.

American Cotton Exports by Country

Since the second half of 2021, American cotton exports have started to decline steadily. The most prominent drop was recorded in October when the supplies abroad fell from 209K tonnes to 122K tonnes over a month.

In 2020, the amount of cotton lint exported from the U.S. rose significantly to 3.8M tonnes, picking up by +7.3% compared with 2019 figures. In value terms, cotton lint exports fell slightly from $6.1B in 2019 to $6B ( IndexBox estimates) in 2020.

China (1.2M tonnes), Viet Nam (782K tonnes), and Pakistan (507K tonnes) were the main destinations of cotton lint exports from the U.S., with a combined 65% share of total exports. In 2020, the supplies to China grew threefold, while shipments for the other leaders experienced mixed trend patterns.

In value terms, China ($1.8B), Viet Nam ($1.2B) and Pakistan ($788M) appeared to be the largest markets for cotton lint exported from the U.S. worldwide, together comprising 63% of total exports.

The average export price for cotton lint from the U.S. stood at $1,56 per kg in 2020, shrinking by -9.5% against the previous year. Average prices varied somewhat for the major overseas markets. In 2020, the highest prices were recorded for prices to India ($2,12 per kg) and Indonesia ($1,62 per kg), while the average prices for exports to Viet Nam ($1,5 per kg) and China ($1,54 per kg) were amongst the lowest. In 2020, the most notable growth rate in terms of prices was recorded for supplies to India, while the prices for the other significant destinations experienced a decline.

Source: IndexBox Platform