Washington DC (BBN) – International cotton prices may remain stable in 2015/16, though this will depend in part on changes in world cotton stocks, according to the International Cotton Advisory Committee.

In 2014/15, world ending stocks are forecast up 9.0 per cent to 21.9 million tonnes, reflecting a stock-to-use ratio of 90 per cent.
Starting in 2010/11, the world has accumulated 13.4 million tonnes of stock due to production volumes exceeding consumption volumes.
In 2015/16, stocks are projected to decrease 5.0 per cent to 20.9 million tonnes, reducing the excess volume by 1.0 million tonnes. Stocks held outside of China are expected to decrease by 3.0 per cent, to just under 9.0 million tonnes, by the end of 2015/16.
However, much of this will depend on how the Chinese government handles its reserves. Last month the Chinese government announced that it planned to start selling its stockpiles, estimated at around 11.3 million tonnes, at a price close to the current market price in the hopes of keeping the market stable.
However, no further details have been announced so far, and it’s uncertain how successfully China will be able to sell off its excess cotton stock without destabilizing the market.
World cotton area in 2015/16 is projected down 6.0 per cent to 31.3 million hectares, due largely to lower prices in 2014/15. Assuming a world average yield of 764 kg/ha, production could reach 23.9 million tonnes, down 9.0 per cent from 2014/15.
China’s cotton area is forecast to decrease by 12 per cent to 3.8 million hectares, and production down by 16 per cent to 5.4 million tonnes in 2015/16. While low cotton prices during 2014/15 in India are expected to cause cotton area to decrease by 5.0 per cent to 11.6 million hectares in 2015/16, falling prices for competing crops and a modest increase in the minimum support price may forestall a greater decline.
The Indian monsoon arrived earlier this year compared to 2014/15, and yields may improve 3.0 per cent to 547 kg/ha, limiting the decrease in production to 6.4 million tonnes. Low international cotton prices have limited farmer enthusiasm to plant cotton, and area in the United States may contract 15 per cent to 3.3 million hectares.
Production is forecast to decline by 12 per cent to 3.1 million tonnes. Area in Pakistan is projected to contract 6.0 per cent to 2.7 million hectares due to low domestic prices in 2014/15, and production is expected to decrease 11 per cent to 2.1 million tonnes.
In 2015/16, world cotton consumption is forecast up 2.0 per cent to 24.9 million tonnes. China’s consumption is expected to remain stable at 7.7 million tonnes, though its share of total world consumption will likely decline to 31 per cent, which is the sixth consecutive season of reduction since 2009/10 when it accounted for 40 per cent of world consumption.
India’s mill use is projected up 3.0 per cent to 5.4 million tonnes in 2015/16, accounting for 22 per cent of world consumption.
Strong demand from countries that rely on imports to support their spinning sector is expected to boost world trade in 2015/1 to 7.7 million tonnes. Imports outside of China are projected up 4.0 per cent to 6.1 million tonnes, partially offsetting the 9.0 per cent decline in Chinese imports to 1.6 million tonnes.