The year 2020-21 has witnessed record cotton imports across the world markets. Global suppliers such as the US could generate decent revenue through exports. Vietnam turned out to be the largest destination for U.S. cotton for the first time in 6 years at more than 5 million bales.
The U.S. exports in 2020-21 were the highest in 15 years at 16.4 million bales as per the USDA (US Agriculture Department). There were record U.S. shipments during the month of December which contributed to enhancing the overseas sales figures. Despite U.S. 2020/21 production falling by 5.3 million bales from the previous year, the country could export a pretty heavy quantity to China.
For China, the quantity imported from the US was the largest in 8 years with demand emerging from China’s State Reserve officials. Domestic prices stood higher in 2020-21 which prevented the State Reserve of China from purchasing domestic cotton. Imported U.S. cotton averaged 10 cents higher than domestic China cotton in 2019/20, but in 2020/21 the average rates were approximately 8 cents cheaper. Therefore it was attractive for the Importers to source cotton from the US destinations.
Higher prices in China is relative to international markets mainly because of higher agricultural prices in China (e.g., corn and wheat), quality issues with China’s 2020/21 cotton crop, in addition to the sharp appreciation of the Yuan by approximately 10 percent (against the U.S. dollar). U.S. cotton was estimated to contribute roughly 90 percent of State Reserve imports and nearly 50 percent of China’s total imports in 2020/21. U.S. 2020/21 exports were the largest in 15 years and in context to the global imports it was also a record year.
Bangladesh, Vietnam, Pakistan, and Turkey, emerged as the top 5 largest global imports (China being the largest), were all estimated to have imported record quantities in 2020/21. Higher yarn prices and rising global demand for cotton products spurred imports and cotton consumption. Brazil and India could export healthy volumes to these respective markets; Brazil’s 2020/21 exports exceeded the previous year’s record by roughly 2 million bales, and India is projected to register its highest exports in 7 years. U.S. 2021/22 exports are estimated lower from the previous year at 15.5 million bales by the USDA, despite a larger crop at 18.5 million bales.
China is again estimated to be the world’s largest importer at 10.0 million bales, but down more than 2.8 million from the previous year.
