Global cotton production to be 114.4 mn bales in CY 2022-23: US FAS

In addition to lower supplies in CY 2022-23, higher input costs for cotton lint and electricity are slowing consumption and suppressing profit margins, FAS noted.

For major cotton-producing countries, cotton lint prices are down by more than 20 per cent compared with last CY. However, Pakistan’s levels are up by more than 10 per cent.

Restricted access to imports and persistently high and volatile domestic cotton prices are thwarting Pakistani mills’ purchasing decisions and slowing operating rates, the FAS said in a report. In a recent government report, the November manufacturing index for producing yarn was down by nearly 30 per cent compared with last CY.

Pakistan’s CY 2022-23 cotton consumption is projected to be down by 200,000 bales in February this year to 8.8 million bales, the lowest projected level in over 20 years.

Constrained supplies have severely pressured use in the country. Domestic production is estimated at its lowest level in nearly 40 years at 3.9 million bales this month and imports are unchanged from the previous year.

Severe issues with financing imports have limited mills’ ability to offset declining production with imports. Imports are projected to be down by 500,000 bales this month to 4.5 million, partly due to a depreciating Pakistani rupee.

Importers are having difficulty opening letters of credit to secure imported cotton supplies.

Fibre2Fashion News Desk (DS)