Weak Demand, Stock Increase, Cotton Prices Continue To Bear Pressure In 2020

The 200th phase of the "international textile outlook" released by the global business information company "textile intelligence" said that cotton prices will remain weak in 2019/20 and 2020/21 as cotton supply exceeds demand and supply surplus growth. One of the factors that affect cotton prices is weak demand caused by uncertainty in the US China trade war.

In a press release, the company said that the demand for cotton will continue to be suppressed before the Sino US relations improve, and cotton prices will be suppressed unless there is a major adjustment in cotton production forecast or a stronger sign of the global economy.

In fact, the average spot price of international cotton has been decreasing since 2018/19, and 2019/20 is expected to be 76 cents / pound, 11 cents lower than the average price of 2018/19.

The increase in global inventories has further exacerbated the continued weakness in cotton prices. In fact, the supply surplus of major producer countries is growing. The end of global cotton inventory in 2019/20 is expected to be 1.3% higher than that at the beginning of the year, which will bring downward pressure on cotton prices. This pressure will last until 2020/21, and demand will continue to be weak. Due to improved weather, global cotton output in 2020/21 will reach a second high level in history.