Although US cotton exports started slowly compared to recent years, they are on track to reach the forecast of 10 million bales for 2014/15 cotton season, the Foreign Agricultural Service of the United States Department of Agriculture (USDA) said in its November 2014 report on “Cotton: World Markets and Trends”.
By the end of the first quarter of the current season on October 30, the total cotton exports by the US were just 12 percent of the forecast. One of the reasons for this slow start was that beginning stocks were at the lowest level in over 20 years, limiting the old crop cotton that could be exported.
“In addition, the bearish price outlook is also slowing exports, not just in the United States. Mills around the world have limited early season deliveries in expectation of lower prices later this season when new crop Northern Hemisphere cotton reaches the market,” says the report. In contrast to slow shipments, outstanding sales at the end of the first quarter equaled 50 percent of exports forecast for the season, the third highest level in 15 years. Thus, sales commitments are over 60 percent of forecast exports, well above the historical average for this time of the year, supporting the current export forecast.
In its overview for 2014/15, the report says world ending stocks are likely to be up marginally as slightly higher production and beginning stocks are expected to be partially offset by lower consumption. Total world cotton trade is likely to remain unchanged from the previous season. For the US, production and ending stocks are likely to go up while exports are expected to remain unchanged. The forecast mid-point of the season average US farm price range is unchanged at 60 cents/pound.
Among the major exporters, Australian cotton exports are now revised downwards by 200,000 bales to 3 million bales during the current season on a smaller crop. (RKS)
