In the 2021-22 season, the price of cotton in the international market touched a decade high. And worryingly it continues its growth.
According to the latest update by the International Cotton Advisory Committee (ICAC), the coming crop season looks like a hopeful one for the farmers, with high cotton prices likely to last through the 2021/22 season.
Which is supposed to be a good sign for cotton growers, but according to cotton experts, this has an ultimately negative impact. This will drive cotton-made garments costs, which makes cotton less competitive against other fibers.
It also said cotton prices are likely to be unstable through the rest of the 2021/22 season but it is also improbable that the price will hike much higher than the present point.
The ICAC Secretariat does not think prices or instability to reach those of the notorious 2010/11 season when prices rose all the way to 243.65 cents per pound.
While mill use is likely to remain strong in 2021/22, worldwide stocks are supposed to be adequate to meet the demand. At the end of the 2020/21 season, global stocks are projected at 20.35m tons.
The secretariat’s present price forecast of the season-average A index for 2021/22 ranges from 91 cents to 119 cents, with an average of 103.29 cents per pound.
In November, the ICAC said international cotton production is to show a 6% year-over-year increase versus 2020/21, with the rush led by three of the world’s top five producers — US, Brazil, and Pakistan.