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March 4, 2022

Shipping issues continue to plague cotton industry

Global cotton production for 2021/22 season is currently projected to be 26.11m tonnes and consumption holding steady at 25.67m tonnes. Yet while the fundamentals are fine, the problem is getting the fibre to the spinners.

By Beth Wright

Cotton has a lot of company in its struggle, as the Covid-19 pandemic disrupted global shipping across many industries. But the cotton supply chain is longer and more complex than it is for most other commodities, especially since so much of the production in the West has to be shipped halfway around the world to the countries where it’s transformed into textiles, the International Cotton Advisory Committee (ICAC) says in its latest update.

Those challenges are forcing countries to adapt by streamlining their supply chains. China, Vietnam, and Pakistan imported large amounts of cotton from the United States in 2020/21. According to the ICAC, the import profile has shifted away from the United States with large increases in imports from Brazil and Australia.

Given Australia’s geographic proximity to East and South Asia, this provides a distinct advantage to Australia when shipping ocean freight to Bangladesh, Pakistan, and Vietnam. Australia is clearly capitalising on its increased production capacity and impressive yields, especially in the 2021/22 season, the organisation adds.

The Secretariat’s current price forecast of the season-average A index for 2021/22 ranges from 101 cents to 120 cents, with a midpoint at 109 cents per pound.

The ICAC partnered with the International Trade Centre last summer and is working to double the yields of at least 50,000 smallholder cotton farmers in Zambia by January 2024.

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