The U.S. Department of Agriculture (USDA) has increased its forecast for 2020 U.S. cotton production by 3% to 18.1 million bales, reflecting the first survey-based crop estimate from the National Agricultural Statistics Service (NASS). While harvested area is expected to decline, improved yields are projected to more than offset the reduction.
The USDA expects cotton abandonment to reach 24%, up from 16% in 2019, primarily due to weather-related losses in the U.S. Southwest. Despite fewer harvested acres, the national average yield is forecast at a record 938 pounds per acre, representing a 14% increase compared with the previous season.
Higher Stocks as Domestic Consumption Declines
The August outlook also raised beginning stocks by 100,000 bales, as lower-than-expected mill consumption during the 2019/20 season offset stronger export performance. For the 2020/21 marketing year, domestic mill use has been reduced by 100,000 bales, resulting in an increase of 800,000 bales in projected ending stocks.
The USDA maintained its forecast for the season-average upland cotton price at 59 cents per pound, unchanged from the previous month.
On the global front, the USDA raised its 2020/21 world cotton production estimate by 1.3 million bales. Higher output in the United States, India, and Australia more than compensates for lower production expected in Mali and Greece.
However, global cotton consumption is projected to decline by 1.2 million bales due to weaker demand in India, China, Pakistan, Brazil, and Indonesia. Increased consumption in Bangladesh and Türkiye is expected to partially offset these losses.
Global cotton trade is also expected to soften. Import forecasts have been reduced for Pakistan, Indonesia, and India, while Bangladesh, Türkiye, and Malaysia are expected to increase their cotton imports. As a result of stronger production and weaker consumption, global cotton ending stocks are projected to rise during the 2020/21 season.
