Global cotton consumption is estimated to decline by 3.3 million bales to 111.7 million in December 2022, as per the data by US Department of Agriculture (USDA). Factors like declining supplies, falling yarn orders from fabric and apparel companies, lower profit margins for spinning mills, and higher inflation levels are all pressuring consumption.
Significant challenges for the three largest consumers — China, India, and Pakistan — are expected to lower global consumption significantly below the previous 2 years. India’s consumption is projected down 1 million bales this month to 23 million, falling more than 2 million from the previous year and the largest year-over-year decline for all cotton consumers. Significantly lower beginning stocks, falling exports of textiles (yarn and fabric) and cotton products, and less competitive yarn export prices are pressuring consumption prospects. Higher spot prices for cotton relative to other major spinners have eroded India’s stature as a competitive yarn exporter to China.
China’s consumption is also projected down 1 million bales this month to 35.5 million, marginally above the previous year but more than 5 million below 2 years prior. As the world’s largest cotton consumer and importer of cotton yarn, China’s supply and use situation is normally indicative of the overall direction and vitality of the global cotton supply chain, according to the report by USDA.