Washington, DC (BBN) – Global cotton production is expected to grow for the second consecutive season by 7.0 per cent to 24.6 million tonnes in 2017/18, according to the International Cotton Advisory Committee (ICAC).
The ICAC also said world cotton area is projected to expand by 7.0 per cent to 31.8 million hectares, which remains below the average of 32.3 million hectares of the previous ten years despite prices above their long-term average.
In 2015/16, world cotton production declined by 19 per cent to 21.3 million tonnes, which was the lowest volume since 2002/03.
This was a result of both a 9.0 per cent contraction in area due to low cotton prices and a 10 per cent fall in the world average yield.
India will likely be the world’s largest producer for the third consecutive season with production growing by 6.0 per cent to 6.1 million tonnes.
An early and adequate monsoon, a higher minimum support price, and the prospect of better returns from cotton compared to competing crops have encouraged farmers in India to expand area by 8.0 per cent to 11.3 million hectares.
Cotton area in China is expected to expand by 3.0 per cent to 3.2 million hectares due to high cotton prices and the new subsidy announced during the planting season.
Assuming an average yield of 1,558 kg/ha, production could increase to 5.0 million tonnes.
Production in the United States is forecast to increase by 12 per cent to 4.2 million tonnes, which is the largest volume since 2007/08.
High prices, sufficient soil moisture in dryland areas and beneficial weather during planting is driving the increase in area and production.
After two seasons of decline, cotton area in Pakistan is projected to grow by 8.0 per cent to 2.7 million hectares. Production could reach 2.0 million tonnes, assuming an average yield of 741 kg/ha, up by 11 per cent from 2016/17.
On the other hand, world cotton consumption is expected to increase by 2.0 per cent to 24.7 million tonnes based on expectations of growth in the global economy.
China leads as the world’s largest consumer of cotton, though its mill use remains unchanged from 2016/17 at 7.7 million tonnes.
High domestic and international cotton prices and constrained supply are likely to limit any growth.
After a 3.0 per cent decline last season, India’s consumption is forecast to recover by 3.0 per cent to 5.3 million tons.
Pakistan’s consumption is expected to increase by 3.0 per cent to 2.3 million tonnes.
However, mill use in Bangladesh and Vietnam is projected to rise by 5.0 per cent to 1.5 million tonnes and 7.0 per cent to 1.3 million tonnes, respectively.
The United States will continue as the world’s largest exporter of cotton in 2017/18 despite a projected 7.0 per cent reduction in exports to 2.9 million tonnes.
This is due largely to the fact that there will be a much larger supply of cotton from other countries on the global market compared to 2016/17.
As a result, its share of world exports is expected to fall from 50 per cent in 2016/17 to 37 per cent in 2017/18.
After declining by 28 per cent to 900,000 tonnes in 2016/17, exports from India are projected to rise by 2.0 per cent to 930,000 tonnes.
While imports in China will likely be limited by quota, they are projected to increase by 1.0 per cent to 1.1 million tonnes.
Imports by Bangladesh are expected to increase by 7.0 per cent to 1.5 million tonnes and Vietnam by 8.0 per cent to 1.3 million tonnes.
World ending stocks are forecast to decline by 1.0 per cent to 17.1 million tonnes in 2017/18.
China’s stocks are expected to decline by 18 per cent to 7.6 million tonnes, and its share of world stocks is expected to decline to 44 per cent, which would be the first time since 2011/12 that it held less than half of global stocks.
Stocks held outside of China are expected to rise by 17 per cent to 9.6 million tonnes. This would be one of the highest volumes on record and indicates that prices should fall.