ICAC: Cotton prices may remain at current levels
Posted December 9, 2021
By Seshadri Ramkumar
LUBBOCK, Texas – Strong cotton demand is driving price.
The 79th plenary session, “Fortifying the Cotton Supply Chain: New Approaches to New Challenges,” of the International Cotton Advisory Committee (ICAC) began this week. Cotton prices at the current level may last during the 2021/22 season, but the chances of going beyond the current higher levels are not there, according to Matthew Looney, data scientist, ICAC.
With production higher in the United States and Brazil going into the 2021/22, stocks are available to satisfy the demand.
With holiday season ahead, there will be demand enhancement for cotton and textile products. But factors such as supply chain bottlenecks and the emergence of the Omicron variant may affect consumer buying.
“If we have demand increase, stocks will be there,” Looney said.
n talking recently to a veteran cotton purchaser for a major textile mill in India, mills are expecting a leveling of cotton price. Mills are cautiously buying cotton, say, for 10-day production needs and hoping that new arrivals will bring down the price in India.
“Prices cannot remain high,” said Lorena Ruiz, economist at ICAC. When prices crossed the 90 cents range in previous seasons, prices came down in the following seasons, added Ruiz.
Countries like Vietnam, Bangladesh have increased textile manufacturing and hence more demand for cotton.
While demand is still driving the price, given the stock levels, price levels may remain at the current level, but hoping for higher level may not be feasible. However, it is not precisely possible to predict how prices may trend, given the supply-demand situation.
Dr. Seshadri Ramkumar, Ph.D., CText., FTI (U.K.), FTA (honorary), is a professor at the Nonwovens & Advanced Materials Laboratory at Texas Tech.