Market Analysis: Data On Cotton Production And Marketing At Home And Abroad

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In 2022/23, China's cotton output will be 6.79 million tons, a year-on-year increase of 960000 tons (16.5%), and consumption will be 7.9 million tons, a year-on-year increase of 520000 tons (7%), a decrease of 800000 tons compared with 2020/21.

In 2022/23, China's cotton production has been determined, with little change in output; The subsequent adjustment is more about the consumer side. From December to March, China's cotton output increased by 870000 tons, and 2021 is a good year for both unit yield and indicators. After the liberalization of the epidemic, cotton consumption began to rise gradually. A data agency in China has raised the level of 300000 tons since April, and the cotton ending inventory in 2022/23 has continued to fall in the past three months

Imports: The US Department of Agriculture and the Cotton Information Network estimated that the cotton import volume in 2022/23 would be between 1.42-1.45 million tons, with 1.06 million tons accumulated from September to May 2022. Then the cotton import volume in July, August and September would be about 360000 tons, with an average of 120000 tons per month.

Consumption: The consumption recovery exceeded the market expectation. According to the high consumption rolling average in recent months, the consumption estimate of 750000 tons in June, July and August was given. According to the five-year average of June, July and August, the monthly consumption could basically reach 650000 tons.

Assumption 1 of carrying forward inventory: monthly cotton consumption is 750000 tons, import 120000 tons, and monthly cotton inventory decreases 630000 tons. Then by the end of August, carrying forward inventory is 1.6 million tons, about two months' consumption.

Assumption 2 of carrying forward inventory: monthly cotton consumption is 650000 tons (the average in the past five years), import is 120000 tons, and monthly cotton inventory decreases by 550000 tons. Then by the end of August, carrying forward inventory is 1.84 million tons, about 2.83 months of consumption.

Conclusion: By the end of August, the domestic cotton inventory was about 1.6-184 million tons, the lowest level in five years, of which the five-year average of domestic cotton commercial inventory was 2.36 million tons, 2.56 million tons in 2021, and 1.92 million tons in 2020.