News
Flooding and Drought Are Having a Crushing Impact on the Global Cotton Industry
For Immediate Release
Date Posted: 1 September 2022
Executive Summary
Highlights from the September 2022 Cotton This Month include:
- The impacts of climate change are being felt in multiple major cotton-producing countries
- Floods have been devastating in Pakistan, with nearly 1,200 people killed to date
- More than 33 million people have been affected and the economic costs are approaching $10 billion
- On the other side of the world, the West Texas crop has been gravely damaged by drought, with an estimated loss of 1 million tonnes compared to last year
- Globally, we will see continued volatility and potentially higher prices throughout the entire 2022/23 season
Flooding and Drought Are Having a Crushing Impact on the Global Cotton Industry
The massive human suffering in Pakistan is painful to witness, with more than 33 million people affected and nearly 1,200 killed to date. The entire global cotton industry is keeping the country and its people in their thoughts and prayers.
The impact on the cotton crop will not be fully realised until the water subsides but sources on the ground are reporting a large reduction in the expected crop for the 2022/23 season. The ICAC is reducing the estimated production for Pakistan from 1.5 million tonnes to 1 million tonnes. Below is the current snapshot of the Pakistan balance sheet.
In the United States, the effects on the cotton crop in Texas have been devastating and currently amount to an estimated loss of over 1 million tonnes compared with the previous season. This puts the current US crop at just over 2.7 million tonnes. And while the West Texas region has received a good amount of rain in the past few weeks, the precipitation has come much too late to help the dry land cotton — and if bolls are open in irrigated fields, it could spell trouble for quality.
Price Projections*
The Secretariat’s current price forecast of the season-average A index for 2022/23 ranges from 99 cents to 157 cents, with a midpoint at 126.95 cents per pound.
Cotton This Month is published at the beginning of the month with the Cotton Update published mid-month. The Cotton Update, which is included in the Cotton This Month subscription, is a mid-month report with updated information on supply/demand estimates and prices. The next Cotton Update will be released on 15 September 2022. The next Cotton This Month will be released on 3 October 2022.
If you are a subscriber to ‘Cotton This Month’, please access your account with your user name and password by clicking here.
To subscribe to ‘Cotton This Month’, please click here, then click ‘Paid Publications’ and select the version you want to subscribe to.
Please contact the author, ICAC Data Scientist Matthew Looney, with questions on this report.
_________________________________________________
About the International Cotton Advisory Committee (ICAC)
Formed in 1939, the ICAC is an association of cotton producing, consuming and trading countries. It acts as a catalyst for change by helping member countries maintain a healthy world cotton economy; provides transparency to the world cotton market by serving as a clearinghouse for technical information on cotton production; and serves as a forum for discussing cotton issues of international significance. In addition, members can take advantage of the ICAC’s global network of cotton researchers, whose expertise covers the supply chain from farm to textile manufacturing, and have free access to its cutting-edge technologies like the voice-based app and virtual technology cotton training programme. Committed to ensuring cotton’s continued sustainability, the ICAC is the only intergovernmental commodity body covering cotton that is recognised by the United Nations. For more information, please visit www.icac.org, Twitter or LinkedIn.