USDA Jun supply and demand report

For 2021/22 season, USDA forecasts a lower Indian cotton production, down by 220kt from May, and it also lowers Brazilian cotton production by 110kt. Meanwhile, consumption is lowered by 270kt. Overall, the cotton supply remains tight. 2021/22 global ending stocks are lowered by 150kt from previous month. But recently, new cotton is arrived on the Brazilian cotton market, and local cotton prices dip quickly. In Australia, affected by the rainfall, the harvests are delayed in South Wales.

For 2022/23 season, USDA forecasts a slightly lower cotton consumption, to 26.46 million tons, down 30kt from 2021/22 season. Production is slightly higher. Though Texas need more moisture despite of recent rainfall, USDA reports a good development of U.S. cotton planting this year, and it has not anticipated a production reduction. For India, the cotton planting areas in Punjab are expected to reduce by about 20% from last year, and Indian cotton production may adjust lower later. However, Indian government is active to solve the pest infestation in new season, and the Meteorological Department forecasts ample rainfall will bring during the monsoon, which is beneficial for the cotton crop. Currently, the cotton crop planting progress is favorable in Pakistan. Therefore, we estimate that 2022/23 cotton production is expected to increase.