For the 2014/15 season, the August report of USDA forecasts global world cotton production at 117.6 million bales, up 1.2 million bales above the forecast made in July, but is slightly below 2013/14 cotton output.
In its report, the US agricultural agency says, higher production forecasts in August for the United States and India, resulting from a rise in harvested area expectations, are partially offset by reductions elsewhere.
USDA estimates world cotton acreage in 2014/15 at 33.9 million hectares, up 3.5 percent from 2013/14. Despite a third consecutive season of lower world production and rising world consumption, USDA informs that, production remains 5 million bales above consumption in 2014/15.
In China, the largest producing country, the cotton crop is projected at 29.5 million bales in 2014/15, down 8 percent from 32 million bales last season. The reduction, USDA says, is due largely to fewer incentives for planting cotton in China’s eastern provinces.
Total area in China is projected to decline 11 percent to 4.35 million hectares, with a record yield forecast at 1,477 kg/hectare.
India, Brazil and Australia are also expected to see their crops decline in 2014/15. For India, the late monsoon will likely benefit cotton as some areas, originally expected to be devoted to alternative crops, with an earlier planting window are now projected to move to cotton.
Indian cotton acreage is now forecast at a record 12.2 million hectares, but with reduced yields, due to the delayed monsoon, a crop of only 29.0 million bales is projected, 5 percent below the previous year.
In Brazil, cotton area and production are both expected to decline 6 percent in 2014/15, the report reveals. Acreage is estimated at nearly 1.1 million hectares while the crop is forecast at 7.3 million bales, 500,000 below 2013/14.
In Australia, limited water supplies are expected to further reduce the crop to 2.5 million bales in 2014/15.
The report informs that global cotton consumption in 2014/15 is forecast at 112.6 million bales, up 1.2 million bales from last month and above the previous three seasons.
World cotton use remains well below 2006/07’s record of 124.0 million bales although a modest growth of nearly 4 percent is projected this season as consumer demand for textile and apparel products increases and raw cotton becomes more price-competitive vis-à-vis manmade fibers.
Mill use in China is projected at 36.5 million bales in 2014/15, 2 million bales or 6 percent above the previous season.
Cotton yarn imports by China are expected to decline in 2014/15 as cotton produced domestically becomes more competitive due to the expected reductions in the government price support. Uncertainties about future policies, however, may limit China’s cotton mill use potential in 2014/15.
India’s consumption is forecast to increase about 1.3 million bales in 2014/15 to nearly 24.8 million bales, a record, as strong export demand for India’s cotton products continues.
Mill use in Pakistan and Turkey is expected to expand further in 2014/15. Pakistan’s use is projected at 11.0 million bales, similar to 2012/13, while Turkey’s consumption expands for the third consecutive season to 6.5 million bales.
Global cotton trade is projected at 36.3 million bales in 2014/15, 11 percent below last season and 22 percent below 2012/13’s record of 46.7 million bales.
The decline, USDA informs, is largely attributable to the anticipated reduction in China’s imports, which are now forecast at 8.0 million bales, compared with 13.6 million bales last season, as the Government is expected to limit imports in order to boost consumption of surplus domestic cotton supplies.
However, increases in several other countries will help offset a portion of China’s decline, including Pakistan, Bangladesh, and Vietnam.
Reduced global import demand for cotton is expected to limit shipments for many of the world’s exporting countries. Lower production in Australia will constrain exports, as will India’s lower crop and higher consumption. Export increases are seen from Brazil and the United States.
World cotton stocks are projected at a record 105.1 million bales in 2014/15, 5 percent above a year earlier and the fifth consecutive increase from 2009/10’s recent low of 47.1 million bales, the report reveals.
In 2014/15, China is expected to account for the bulk of these stocks with its own record of 62.4 million bales. The China stocks equate to more than half of this season’s global cotton consumption forecast.
As a result of the rising stocks and anticipated policy effects in China, global cotton prices are expected to decline in 2014/15. The Cotlook A-Index, which averaged $1.65 per pound in 2010/11, averaged about 91 cents per pound in 2013/14 and is likely to average below 80 cents per pound this season, the report concludes by saying.
