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Major events of international cotton market in 2023

2023-12-21 08:25:19 CCFGroup

The international cotton price in 2023 experienced a fluctuating downtrend. The supply side was supported by speculation of production cuts in the first half of the year, but after the market absorbed this bullish factor, the support was limited. On the consumption side, the weakening trend continued as the destocking process of textile and apparel products in various countries had not yet ended, and expectations for the peak season fell short. There were few new orders, and the global consumption recovery process was slow. As the new crop for the 2023/24 season gradually entered the market, global cotton prices were under downward pressure.

Major events of international cotton market in 2023
Month	Events
Jan	Periodical recovery of global cotton consumption;
	The forecast on 2022/23 global cotton production shifted from production increase to production reduction;
	Cotton Association of India adjusted lower Indian cotton production forecast largely in its Jan report.
Feb	Pakistan's foreign exchange reserves decreased, Pakistan Rupee depreciated sharply;
Feb	U.S. cotton export sales increased significantly.
Mar	USDA forecast a higher cotton inventory in 2022/23 season in its Mar report;
	The banking system issue dragged down cotton prices;
	Brazilian cotton prices slumped with accumulating export pressure.
Apr	U.S. cotton export sales entered the oversold stage and reductions increased;
May	Indian cotton arrivals increased counter-seasonally;
May	U.S. cotton abandonment was expected to reduce to half of last year.
Jun	U.S. new cotton planting progress was slow;
Jul	Strong expectations on a good cotton production in Brazil and Australia;
	CONAB estimated that Brazilian cotton inventory accumulation pressure increased;
	China announced to allocate additional 750kt sliding-scale duty quotas.
Aug	Soil moisture in Texas of U.S. worsened and the good-to-excellent ratio of U.S. cotton decreased;
Aug	USDA lowered U.S. cotton production largely by 550kt.
Sep	The gap of rainfall in India enlarged, and expectations on the production turned from production increase to production cut;
	Brazilian agricultural products arrived on the market intensively, leading to tight shipments, and cotton was difficult to shipped;
	Supply increased obviously as Pakistani cotton arrived on the market earlier.
Oct	U.S. cotton export sales warmed up with the procurement from China;
Nov	Indian cotton prices touched the MSP and CCI started to procure seed cotton;
Nov	The delayed rainfall made growers to plant cotton instead of soybean in Brazil.
Dec	USDA forecast a lower global cotton consumption.

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