According to the latest U.S. Department of Agriculture (USDA) cotton projections for 2020/21 (August-July) (released on June 15th, 2020), world cotton production in 2020/21 is forecast at 118.7 million bales, 3% (4.2 million bales) below the previous year, but similar to 2018/19 production.
Smaller cotton crops are forecast for most of the major cotton-producing countries in 2020/21, led by India (down 2.0 million bales), Brazil (down 1.2 million bales) and China (down 750,000 bales). Larger crops in Australia and Pakistan are expected to partially offset these declines. The global cotton harvested area in 2020/21 is projected at approximately 33.5 million hectares (82.7 million acres), nearly 4.5% below 2019/20. The world cotton yield is forecast at 773 kg per hectare (690 pounds per acre) in 2020/21, slightly above the previous season but similar to 2018/19.
For 2020/21, India is expected to remain the leading cotton-producing country. A lower cotton crop there, projected at 28.5 million bales, is the result of a 6% reduction in 2020/21 area to 12.5 million hectares, while the yield is forecast near 2019/20 at 496 kg per hectare. India is expected to account for 24% of the world’s cotton production in 2020/21.
Production in China is forecast nearly 3% lower in 2020/21 at 26.5 million bales, as area is reduced 4% to 3.3 million hectares. However, most of the area remains in the high-yielding Xinjiang region, and China’s 2020/21 yield is projected to increase to 1,748 kg per hectare, somewhat offsetting the four-year low area estimate. China is expected to account for 22% of total world cotton production in 2020/21.
Cotton production in Pakistan is forecast at 6.3 million bales in 2020/21, 100,000 bales above 2019/20 when production was at a 33-year low. With reduced area, higher yield expectations are projected to improve Pakistan’s cotton crop prospects slightly in 2020/21.
Meanwhile, cotton production in the Southern Hemisphere countries of Brazil and Australia is projected to move in opposite directions in 2020/21. For Brazil, production is forecast at 12.0 million bales, 9% below the 2019/20 record of 13.2 million bales. Lower prices and higher production costs are expected to reduce area by 7%, with Brazil’s yield also reduced for 2020/21. In contrast, Australia’s cotton crop in 2020/21 is projected to rebound from the drought reduced crop of 2019/20 when cotton area fell to a 40-year low of only 60,000 hectares. For 2020/21, cotton area is forecast at 180,000 hectares, with Australia’s crop expected to increase nearly 1.1 million bales to 1.7 million bales. Nevertheless, area and production remain below those reported just a few years ago when reservoir levels were considerably higher.
Cotton Mill Use and Trade Projected Higher in 2020/21
As the global economy begins to recover from the COVID-19 pandemic, cotton mill use is also expected to rise. Global cotton mill use is forecast at 114.4 million bales in 2020/21, nearly 12 million bales (11.5%) above 2019/20. China and India continue as the largest users of raw cotton in 2020/21, and all major countries are forecast to experience a rebound as each country’s cotton spinning industry adapts to the recovering global economy.
For 2020/21, global cotton mill use is expected to be led by China, India, and Pakistan, with a combined mill use forecast at 70.3 million bales, or 61% of the world total. Cotton mill use in China is forecast at 37.0 million bales in 2020/21, 4 million bales (12%) above 2019/20 but below the previous 3 years. Textile mills in China are expected to have access to plentiful supplies of domestic cotton in 2020/21, as well as cotton imports that are forecast to rise 20%.
For India, cotton mill use is projected to increase 3 million bales (15%) to 23.0 million bales in 2020/21. Although India will have ample supplies with its record cotton stocks, 2020/21 mill use is forecast to remain below the recent pre-COVID-19 levels.
For Pakistan, 2020/21 cotton mill use is projected at 10.3 million bales, 1.3 million bales (14%) above the year before. Like China and India, Pakistan’s mill use is expected to rebound moderately but is still forecast below 2018/19.
Similarly, countries outside of China, India, and Pakistan are forecast to increase mill use in 2020/21 but remain beneath the recent peak.
Global cotton trade is also forecast higher in 2020/21 and is projected at 42.9 million bales, 8% (3.1 million bales) above the previous season and the highest in 8 years. Higher trade expectations are projected as mills around the world reopen or increase spinning rates in response to the anticipated rise in global demand for cotton products. Increased supplies for the top exporting countries (the U.S., Brazil and India) are also expected to support higher shipments. While U.S. cotton exports are forecast to increase 1 million bales to 16.0 million bales in 2020/21, shipments from Brazil are projected to expand 400,000 bales to a record 9.0 million bales. Meanwhile, India’s cotton exports are forecast to rise dramatically from 3.0 million bales in 2019/20 to 4.5 million bales in 2020/21, a 50% jump.
With world cotton production expected to exceed mill use in 2020/21, stocks are projected to increase. Global ending stocks are forecast at 104.7 million bales at the end of 2020/21, 4% (4.1 million bales) above the beginning level and the largest since 2014/15’s record of 106.7 million bales. However, with world cotton mill use expected to increase in 2020/21, the global stocks-to-use ratio is forecast to decline slightly from 2019/20 to 91% in 2020/21.
