The industry set off a wave of production cuts, this raw material soared 30%

Release time:

2022-08-22

According to the Caixin News Agency, almost all of the world's large cotton suppliers have cut production this year due to extreme weather, which has pushed up cotton prices by as much as 30 percent.

Almost all of the world's large cotton suppliers have cut production this year due to extreme weather, pushing up cotton prices by as much as 30 percent, according to the Caixin News Agency.

Looking forward to the second half of the year, cotton production is still expected to be difficult to recover, and market analysts predict that cotton prices may continue to soar in the next few months.

All the world's major cotton suppliers have seen production cuts.

Since the beginning of this year, the world's major cotton suppliers have been affected by extreme weather, and cotton production has decreased.

In India, the world's largest cotton producer, continuous heavy rains and pests this summer have severely affected India's cotton production and forced the country to import cotton from overseas this year.

In the United States, the world's largest cotton exporter, increasingly severe dry weather has reduced cotton production by 28% to the lowest level in more than 10 years.

Brazil, the second largest exporter of cotton, has also experienced high temperatures and droughts, which have reduced the country's production by nearly 30%.

Global cotton prices have soared by as much as 30 per cent due to extreme weather in various countries. Earlier this year, cotton prices surged to their highest level since 2011, squeezing the profit margins of global clothing suppliers and pushing up the cost of clothing and other cotton products.

Earlier this week, Jane Elfers, CEO of Children's Place, North America's largest children's clothing retail brand, said in an investor call that soaring cotton prices are "a very, very big problem we face" and that the company hopes to see cotton prices fall in the second half of this year.

However, judging from the situation in the United States and Brazil, Elvers's hopes may be coming to nothing.

Cotton prices or continue to soar in the second half of the year

The United States and Brazil together account for half of global cotton exports. Judging from the forecasts of these two countries alone, the cotton supply situation may not improve in the second half of the year.

According to Brazilian agricultural organization Abrapa, the dry weather in Brazil has caused about 200000 tons of cotton to die, which is expected to drag down the country's output in the next harvest season. Bom Futuro Group, one of Brazil's largest cotton producers, expects production to fall 27% this quarter from the previous quarter. The group's cotton planting area accounts for about 10% of Brazil's total.

At the same time, U.S. cotton production is expected to fall 28% this quarter to the lowest level in the past 12 years, and U.S. cotton stocks are also expected to fall to near-record lows.

The U.S. government had expected global demand to decline due to a decline in clothing purchases and a slowdown in the economy, especially in Europe and Asia. However, Andy Ryan (Andy Ryan), senior relationship manager at Hedgepoint Global Markets, a market analyst, believes that all indications are that the downward pressure on the supply side of cotton is far greater than the demand side. With the decline in cotton production, cotton prices will "rise significantly" in the coming months ".

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