Lower Consumption of Cotton Will Lead to Higher Ending Stocks for Both 2014/15 and 2015/16

Lower consumption of cotton will lead to higher ending stocks for both 2014/15 and 2015/16 relative to last month, says the US department of agriculture (USDA) in its estimate for this month’s world cotton supply and demand.

For US, the report keeps cotton production forecast unchanged from last month at 14.5 million bales, as lower expected abandonment and slightly higher yields offset the reduced planted area indicated in the Acreage report released by the National Agricultural Statistics Service (NASS).

The NASS report estimates all cotton planted area for 2015 at 9 million acres, which is the lowest cotton acreage in the United States since 1983. Upland cotton is estimated at 8.85 million acres, down 18 percent from 2014.

“The 2015/16 projected ending stocks are 4.2 million bales, down 200,000 from last month and unchanged from the beginning level. The projected range for the marketing year average price received by producers of 54 to 70 cents per pound is raised 4 cents on the lower end, with a midpoint of 62 cents,” states the USDA report ‘World Agricultural Supply and Demand Estimates’.

The report predicts sharp reduction in cotton consumption by China for both 2014/15 and 2015/16 relative to last month, due to continued strong competition from both polyester and imported cotton products.

Meanwhile, 2015/16’s projected growth in world cotton consumption is above 3 per cent, as this month’s reductions in consumption by China, Brazil, Bangladesh, and Pakistan are partially offset by increases for India and Vietnam, according to the report.

While world production is about unchanged, world trade is raised, as lower imports by China, Pakistan, and Bangladesh are more than offset by an increase for Vietnam.

The USDA has raised projected 2015/16 world ending stocks by more than 2 million bales. However, with the expected China carryover 2.5 million bales above last month, stocks outside of China are projected lower, the report says.